For years we have been hearing breathless reports about wealthy Asians sending a relentless stream of cash into realty markets like Vancouver and Toronto. This weekend the Globe Report on Business ran with a detailed look at Canadian housing markets including How mortgage fraud is thriving in Canada’s hot housing market and Vancouver’s house-buying frenzy leaves half-empty neighborhoods.
But it turns out that it’s not so much Asian cash that has been flooding into bubbling Canadian realty… but rather cash from Canadian banks backed by little old we Canadian taxpayers. More bailouts of reckless risk-taking everyone? See: Bank mortgages, not bags of cash, behind mainland Chinese home buys: study:
“…recent reports such as one in August by Macdonald Realty, found buyers with “mainland Chinese sounding names” accounted for 70 per cent of the firm’s 2014 sales of single-family homes, condos and townhouses over $3 million in Vancouver.
Yan describes the neighbourhoods he looked at for this case study as the centre of mainland Chinese buying. But he said he was surprised to find 82 per cent of the homes sales he looked at held a mortgage and that three Canadian banks account for almost 70 per cent of the financing was surprising.
…70 per cent of all sales on the Multiple Listing Service in a recent six-month period, worth more than half a billion dollars, were bought with mortgages extended by just three Canadian banks: CIBC, BMO and HSBC Canada.”