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