After three Australian banks made the move to eliminate financing for foreign buyers, we asked a leading broker what the chances were of similar practices being adopted by Canadian lenders.
Slim-to-none, it turns out.
“What percentage of foreign buyers require financing? If you’re going to look at eliniating financing for foreign buyers, as an institution, I think they would look at it and realize represents less than 3% of their book of business,” Dustan Woodhouse, a B.C.-based broker with Dominion Lending Centres, said.
A small percentage that, if eliminated, would have little to no impact on the housing market.
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.
Those stats are far from perfect – but they may be the best the industry currently has.
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Measures to cut back on financing foreign-purchased real estate will have little impact on market, according to one leading mortgage broker.