An Australian bank has said it will no longer finance foreign-purchased homes, but such an initiative here would be un-Canadian, according to one leading broker.
“I would say it’s not true to Canadian values to exclude anybody. We tend to welcome people to our country. This is more a case of welcoming their money and not them,” Dustan Woodhouse
, a broker with Dominion Lending Centres
Canadian Mortgage Experts, told MortgageBrokerNews.ca. “And that’s a finer distinction to make. It’s a slippery slope: You start excluding one group, what’s the next step?”
Australian-based bank Westpac announced it will no longer loan money to foreigners purchasing residential property.
As of April 26, the bank and its subsidiaries no longer lends to non-residents and temporary visa holders. Westpac is the third major Aussie bank to make the move, following announcements from competitors ANZ and Commonwealth Bank earlier this month.
Much has been made about the influence foreign money is having on Canadian real estate prices, and many may argue a similar ploy would help to naturally cool the red-hot market.
However, Woodhouse argues a similar clampdown would have very little impact.
“The bottom line … in my professional experience is the majority of foreign buyers don’t require financing,” Woodhouse said. “Much like the Canadians who bought up a massive part of Arizona. Any Canadian who thinks foreign buyers should be cut out hopefully (haven't) bought a property in the U.S.”
The Canada Mortgage and Housing Corporation recently released a report on foreign ownership that estimated the influence of foreign money on two of the country’s hottest housing markets.
The report found that foreign ownership is most prevalent in new condo buildings in Toronto and Vancouver.
In Toronto about 10% of newer buildings (built after 2010), compared to 2% of those buildings built in the 1990s.
A similar trend was found in Vancouver, where 6% of units in newer buildings are believed to be foreign-owned.