The Royal Bank of Canada (RBC) has scrapped an internal limit of CAD 1.25m ($1m) on its mortgage loan size for immigrants, so as to tap into the surging demand from wealthy buyers, mostly from China, for financing on multi-million dollar houses in Vancouver. A recent survey revealed that over six months, two-thirds of buyers of detached homes in prime neighbourhoods in Vancouver had names typical of people from mainland China, with just 8% of them also having a mortgage from between CAD 1.25m ($1m) to CAD 9m ($7m), backed primarily by three banks, Canadian Imperial Bank of Commerce (CIBC), Bank of Montreal (BMO) and HSBC Canada; RBC held 88% of the loans. This may dis-spell the myth about Chinese buyers showing up with suitcases of cash, however, questions are being asked as to how the banks are lending up to CAD 9m to people with no credit - what is their collateral?
The Royal Bank of Canada (RBC) has scrapped an internal limit of CAD 1.25m ($1m) on its mortgage loan size for immigrants, so as to tap into the surging demand from wealthy buyers, mostly from China, for financing on multi-million dollar houses in Vancouver. A recent survey revealed that over six months, two-thirds of buyers of detached homes in prime neighbourhoods in Vancouver had names typical of people from mainland China, with 88% of them also having a mortgage from between CAD 1.25m ($1m) to CAD 9m ($7m), backed primarily by three banks, Canadian Imperial Bank of Commerce (CIBC), Bank of Montreal (BMO) and HSBC Canada; RBC held just 8% of the loans. This may dis-spell the myth about Chinese buyers showing up with suitcases of cash, however, questions are being asked as to how the banks are lending up to CAD 9m to people with no credit - what is their collateral?