Royal Bank CEO Issues Warning About Flood Of Foreign Money In Canadian Real Estate

Foreign capital is “using Canadian real estate as a piggy bank” says RBC CEO David McKay.

The head of Royal Bank of Canada says Canada’s housing market is being distorted by a flood of foreign money, and he says it’s having a negative impact on the livelihood of Canadians.

Bloomberg reported the comments by David McKay which were made at a recent bank conference.

“We do not need foreign capital using Canadian real estate as a piggy bank. If capital is coming in to sit in a home, unproductively, and is distorting your marketplace and the livelihood of your residents — no thank you.”

McKay also reportedly said “A surge of foreign money into Canadian housing had been adding “gasoline” to markets in Vancouver and Toronto.”

His comments are among the clearest and toughest comments that have been made by a Canadian CEO when it comes to the issue of foreign homebuyers, and “he’s supportive of government taxes and other measures targeting foreign buyers, as well as other regulatory efforts to cool the country’s housing market.”

Ban on foreign homebuyers is needed

We should go a step further.

Dealing with a similar problem, New Zealand instituted a full ban on foreign homebuyers.

Canada should do the same.

Our government is supposed to look out for our own citizens, and we should not allow foreign homebuyers to make cities unaffordable for Canadians. Canada’s cities are supposed to be for those who actually live in the country, not those who just have a ton of money to throw around across the world.

Spencer Fernando

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5 comments Add yours
  1. I couldn’t agree with you more Spencer. This is a huge issue on so many levels yet you have globalist and weak politician John Horgan who could care less about Canadians and especially Canadian’s who bear the brunt of new taxes to come:

    “I just don’t believe [that] in an open economy [banning foreign buyers is] an appropriate way to proceed. A ban on foreign buyers sends the wrong signals to investors about B.C.’s economy.” (John Horgan, 2018).
    http://www.huffingtonpost.ca/2018/01/17/b-c-premier-john-horgan-says-he-wont-ban-foreign-buyers_a_23335977/

    So, the concerns of foreign investors take precedence over the people of BC and other Canadians. Thanks for making your thoughts clear on this matter.

    Horgan’s “fix” is to apply a “speculation tax” to people (Canadians included) who do not pay income tax in B.C. Although realtor Mark Parsons tells us why this is not actually a speculation tax but an empty home tax applied to anyone living outside of BC, including Canadians:
    https://www.youtube.com/watch?v=v1SNtY0IzHM

    In 2019, the annual “speculation” tax rate will be 2% of assessed value. It will initially apply to the big markets (Metro Vancouver, the Fraser Valley, the Victoria area, the Nanaimo Regional District, Kelowna and West Kelowna). That’s $10,000 annual “speculation” tax on a home valued at $500,000.

    “Cameron Muir, chief economist at the B.C. Real Estate Association, said the tax could hit B.C. residents who have vacation properties or second homes, as the credit may not be enough to offset it.”
    http://www.news1130.com/2018/02/20/b-c-unveils-housing-plan-that-raises-foreign-buyers-levy-and-taxes-speculators/

  2. I was living in a townhouse in Ottawa. It was rented. The owner was ready to to sell them the the renters. I thought great, why not? Many I think unwisely in my opinion thought that rent controls were a good deal and they did not want to be able to buy their own unit. Instead some off-shore business from an Asian country was able to buy all the units! Now what does bringing in foreign money from an Asian country where people make less do for the Asian country where the money came from? What does it do for Canada? Increase prices in Canada as we have seen? Wow such simple science? Many other countries restrict foreign ownership? Why not Canada?

  3. So McKay is speaking up now is kind of like closing the barn door once the horse has bolted. I suppose the unaffordable real estate in Toronto and Vancouver is starting to cost his bank money otherwise he would have kept silent. And are not the NDP ever so eager to impose taxes on capital. These taxes will apply to Albertans and other Canadians who own cottages just inside of BC border in the Rockies which some have had for many years and yet they will be taxed on their cottage assessed value every year just as if they were foreigners.

  4. This has effected me personally. When I retired I had enough for a good downpayment on a house. I decided to keep renting to pay down my debt. so when I did buy. I would be OK

    Now I am almost out of debt, but the prices for housing is so insane, I can no longer afford to buy.
    I worked 40 years, paid insane tax,,, and now I am screwed, for my dream home.

    Fed up with this insane crap. Now they are going to import 1 million third worlders into Canada? We already have NO housing.

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