Foreign inflows are distorting Canada’s already constrained housing market and aren’t the kind of investment the country needs, the chief executive officer of Royal Bank of Canada said.
“We do not need foreign capital using Canadian real estate as a piggy bank,” David McKay, said Tuesday at a bank conference in New York hosted by the Toronto-based lender. “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.”
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McKay, whose bank is Canada’s largest mortgage lender, says 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. He’s seeing some impacts from these rule changes, with “a little bit more healthy dynamics.”
“Demand is down and house prices have been stable,” McKay said. “There’s still intensive bidding, but to a lesser degree.”