HSBC will no longer provide mortgages to certain Chinese nationals, as more and more endeavour to filter their assets out of the struggling economy – many of whom have been focusing on real estate in New York, Vancouver, and several other hot housing markets around the world.
It will no longer lend to Chinese nationals holding temporary visitor B visas if the potential buyer’s assets are held in China.
HSBC told Mansion Global, a luxury homes website, about the change last week.
“No new mortgage applications will be accepted, but the applications which have been submitted successfully will not be affected,” an HSBC loan officer told the publication on condition of anonymity.
No word yet whether the lender will roll the policy out to other markets. The precedent, however, has now been set and time will tell whether or not HSBC competitors will implement similar restrictions.
The policy change comes amid growing concern around the influence foreign money has on real estate markets, including those in the United States and Canada.
It remains to be seen how the change will impact the mortgage market south of the border. However, with many foreign nationals opting to pay cash for their purchases, such a change may do little to curb the influx of foreign funds.
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One lender is pulling back on how much it will lend to Chinese citizens in America. Could the trend come to Canada next?