Broker: ‘We have to turn our focus to foreign buyers’

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One broker has a suggestion for better tracking foreign investment in Canada’s real estate market.

“We have to turn our focus to foreign buyers and better track the stats; it’s unfair for Canadians living here that foreigners are coming in and boosting home prices,” Walid Hammami, a Montreal-based broker with Dominion Lending Centres, told “The banks should have to report foreign purchases to CMHC so we know exactly how much money is coming in.”

Hammami’s comments come on the heels of news that RBC has removed its in-house cap for mortgages on foreign-owned properties in Vancouver.

"We're seeing a lot of affluent newcomers looking to buy high-purchase price homes," Christine Shisler, RBC’s director of multicultural markets, told Reuters. "Now we can actually service any mortgage amount."

Shisler said the bank removed its internal $1.25 million mortgage limit for buyers who have no Canadian credit history in May.

It’s a move Hammami says will help RBC win valuable market share in the mortgage market. And it’s a niche the big bank has been serving well, according to Hammami.

“I had a file for a foreign investor who wanted a condo; BMO didn’t want to do it as a rental condo and the client wouldn’t do it as owner-occupied,” Hammami said. “We sent it to RBC and they did it as a rental condo, which is insane.”

Despite the lack of stats on foreign investment, Hammami believes it’s a real driver of prices – and has led to affordability issues for Canadians. He even argues in favour of charging higher rates for clients known to be investors from overseas.

“Maybe they should increase the mortgage rates for foreign investors,” Hammami said. “It sounds unfair but we have to do what’s right for our citizens.”
  • Pete Edwards on 2015-11-03 9:42:55 AM

    Interesting. I was not aware that BMO or RBC were accepting broker business. Do they in Quebec?

  • Darlene on 2015-11-03 11:07:50 AM

    I endorse your comment Hammami. How can be allow foreigners to dictate our property prices. There is speculation that home prices are overvalued, why are we allowing foreigners to create this risk. Foreigner needs to pay much higher interest rates.

  • Jerry Quigley on 2015-11-03 1:37:13 PM

    Oh for gawd's sake, move to Cuba! Aren't we, as brokers, free enterprisers? The market dictates the market, not regulations and big brother.

  • Michael on 2015-11-03 2:37:43 PM

    He suggests that we need to discourage foreign investors, but he still went ahead and secured the loan for this foreign investor? Isn't that the very definition of hypocrisy?

  • Michael on 2015-11-03 2:42:49 PM

    And if it's all high end real estate, who cares? The vast majority of Canadians aren't in the market for a $1,125,000 condo. If you are, then clearly affordability isn't an issue for you. If foreign investors were buying up houses under the $350,000-$400,000 ceiling in droves, then yes, that could be a problem for the vast majority of Canadians. Living in a $1,000,000+ condo (or house) is a choice... not a necessity.

  • Kuldip S Panesar Homeland Mortgage Corp. on 2015-11-03 3:15:42 PM

    What is the harm if foreigner are investing in real estate ? Government delegations are visiting other countries to induce them for investments in Canada. Let the free market decide the price . If some bank is financing on rental property and other is not this may be their own bank policy .

  • Kuldip S Panesar Homeland Mortgage Corp. on 2015-11-03 3:16:41 PM

    What is the harm if foreigner are investing in real estate ? Government delegations are visiting other countries to induce them for investments in their countries . Let the free market decide the price . If some bank is financing on rental property and other is not this may be their own bank policy .

  • George on 2015-11-03 5:55:11 PM

    Walid, I see two issues with your comments. First, this is Canada, not North Korea. In Canada, the free market dictates the pricing of homes. If you want capped prices, move to Cuba or North Korea. Secondly, you commented that you asked if the client would do the home as owner-occupied rather than a rental. Are you suggesting that the client lie? Maybe you should read the mortgage brokers act my friend.

  • Michael on 2015-11-04 12:59:19 AM

    Hi Kuldip,

    To a degree I agree... let the market decide the values. The issues are when we end up with a "pump and dump" market scenario; it can devastate communities. If prices rise too much and businesses and business people move or set up elsewhere, it undermines the economy of an area... then when foreign speculative investors begin dumping the properties back on the market, and home owners who just bought in find values around them dropping rapidly, they can find themselves "underwater", with a house worth less than the mortgage they just took out on it, and a desolate business landscape in terms of getting a job to pay the mortgage. I believe in a free market, but coordinated "flash mob" speculation is just as much a form of market manipulation as government imposed barriers. Neither are good for the average family that just wants a stable family home in a stable, improving community.

  • Walid Hammami on 2015-11-04 1:35:50 PM

    @Pete Edwards: I just want to clarify something, I referred the client to RBC mortgage specialist. The client originally started the file with RBC but his real estate agent asked him to make the deal with BMO, it didn't go through with BMO and the notary called me for help, I had to delegate the deal to RBC because of the time left in the purchase offer. So no we cannot refer to BMO or RBC but the truth is, they send us deals and we send them deals. They can't do everything and so do we.

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