Canada

CIBC Kills Foreign Income Program, Makes Buying Canadian Real Estate Harder

CIBC Kills Foreign Income Program, Makes Buying Canadian Real Estate Harder

Foreign buyers just got one of the most aggressive hurdles when buying Canadian real estate. The Canadian Imperial Bank of Commerce (CIBC) quietly notified its mortgage advisors the “Foreign Income Program” has ended. The program was replaced on February 1, 2018, with a new program designed to ensure compliance with B-20 guidelines from OSFI. This change will have a drastic impact on those that use foreign income to qualify for a mortgage, from one of Canada’s largest banks.

The Old System

The old system at CIBC was amazingly easy for foreign buyers and international students to get a mortgage. If you had a deposit above 35%, it was good enough to get an uninsured mortgage, without your income being verified in many cases. For the bank to be at risk of a loss, the buyer would have to immediately stop paying their bills, and prices would have to decline by 35%. A highly unlikely scenario, in my opinion. This process wasn’t a secret, some branches even had signs advertising it.

CIBC Kills Foreign Income Program, Makes Buying Canadian Real Estate Harder - Student Foreign Buyer

CIBC branch sign advertising “no income verification,” for international students. 

Out With The Old, In With The New

The new income verification system is much more strict, to comply with B-20 guidelines. The internal document sent to mortgage advisors, walks them through the new system. The new requirements outlined include obtaining:

  • The client’s T1 General, complete with foreign income stated (line 104).
  • CRA Form T1135, a.k.a. a Foreign Income Verification Statement, showing assets.
  • Companies using income will require a CRA Form T1134, Information Return Relating To Controlled and Non-Controlled Foreign Affiliates.
  • A Canadian credit bureau report, and a foreign credit bureau report to confirm any foreign liabilities.

From the document, it appears the mortgages will be limited to the amount of overseas income and assets declared to the CRA. That doesn’t sound like a huge deal, but it is for cities like Toronto and Vancouver. Increasingly, people moving into neighbourhoods with the most expensive homes, are declaring poverty levels of income. Some observers have speculated the only way this works, is if overseas income is not being declared locally. You know, because low income families usually can’t even afford property taxes on a mansion.

CIBC Kills Foreign Income Program, Makes Buying Canadian Real Estate Harder – HK Rate Sheet (2016)

CIBC Hong Kong rate sheet for Canadian mortgages, from last year.

Canadian Real Estate Capital To Be Throttled

CIBC is the first bank we’ve received details for, but sources at two other Big Six banks confirmed similar rules are being discussed. The improved income verification does introduce two new downside pressures for real estate prices. First, it’ll be more expensive for non-residents dodging local taxes to buy a house. Second, the amount they can borrow will be stress tested against the declared income.

Those planning on buying a house, won’t be able to declare poverty levels of income. Tax dodgers looking to get a mortgage, will have to pay the “additional” cost of local income taxes, to get a CIBC uninsured mortgage. Those income taxes are going to really kill profits on property, and have a chance of lowering sales. That or they can just not get a mortgage at one of Canada’s largest banks, or any of the others expected to follow with similar rules.

Stress testing non-resident or non-permanent buyer incomes is also going to throttle capital. Previously, uninsured buyers could buy almost anything they could put a downpayment on. No need to actually prove you had sufficient income. Now that uninsured mortgages are required to be stress tested, and incomes need to be declared, these borrowers will be bound by the same rules as anyone else in Canada. Totally unfair, I know – but c’est la vie.

CIBC, a bank known for aggressively pursuing foreign buyers, is the first bank to roll out new foreign income checks. With other banks likely to follow, foreign money faces a new hurdle to buying a home with one of Canada’s largest lenders. OSFI B-20 regulations may be more effective than a non-resident speculation tax, and China’s capital controls combined. That is, if other banks follow with similar regulations, and the government doesn’t add another measure to improve demand.

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Photo: Open Grid.

86 Comments

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  • Reply
    Ban Foreign Investment 6 months ago

    This is great news, CIBC has been one of the biggest problems. No other bank is out pounding the pavement in China as hard as they were. This is GAME CHANGING. Thanks for this.

    • Reply
      vnm 6 months ago

      Right on … good for the CIBC! Hopefully the other banks will get on board soon.

  • Reply
    Michael Z 6 months ago

    The government needs to stop penalizing new immigrants. If I’m reading this correctly, this makes it near impossible for foreign students to buy an apartment before getting here. In Vancouver, it’s already impossible to find student housing.

    • Reply
      Alistair McLaughlin 6 months ago

      Exactly! Who are we to insist that foreign students verify their income, like they were common citizens or something? The audacity! It is a moral obligation that Canada make mortgages available to foreigners without income verification. Reducing those on student visas to the status of mere citizens or permanent residents is demeaning and xenophobic.

      Yes, that’s all sarcasm.

    • Reply
      bluetheimpala 6 months ago

      And? Maybe if there wasn’t a real estate bubble in Vancouver the rents would be cheaper. The smallest violin playing just for the millionaire princelings not being able to buy a condo…boo hoo

    • Reply
      queali 6 months ago

      why would the students need to buy something?

    • Reply
      Matt 6 months ago

      You’re hilarious. Maybe these “investors” should invest with their own money. Otherwise it’s no longer an investment, more like they just introduce risk and want to join the party from abroad.

    • Reply
      Knotmi Reelnm 6 months ago

      Michael Z, can I meet you somewhere so I can punch you in the face? Any foreign student that has 35% down payment on $500k+ dwelling is just laundering for daddy. You are a conspirator to a global money laundering scheme that is destroying our housing market and stripping future generations of the ability to own their own home.

      Why don’t you rent during your brief stay in our country while you occupy spots in schools that should otherwise go to residents?

      My hostility is a result of hardships I have incurred because your demand has outstripped supply not intended for all of China. Go home and take your money with you.

    • Reply
      🤦🏻‍♂️ 6 months ago

      I am an immigrant too and because those foreign speculators I couldn’t buy property at rational value. Stuck in bidding wars with people that don’t even speak English, with people that came just for the bidding and don’t pay taxes here increases the feeling that the government doesn’t control the situation.

      So no, unless you are PR or citizen you shouldn’t have any benefits and advantages especially the ones that allow you to buy / speculate on necessities like housing.

      Luckily I stuck to my evaluation and didn’t pay extra $200k in a bidding war on the property I wanted. Now the new owner dropped price twice and still can’t sell it (after spending so much on renovations) 😂 Great lesson on greed 👍

    • Reply
      Jim 6 months ago

      What is wrong with renting? Isn’t it logical for foreign students to rent rather than to buy?

  • Reply
    vnm 6 months ago

    You are not reading it correctly. It’s just helps make is no more or less impossible than for anyone else.

    • Reply
      Z 6 months ago

      Yes, but now student’s may see their parents income double taxed. Once in China, and once in Canada. CIBC is like working with CRA for an unfair tax grab.

      • Reply
        Alistair McLaughlin 6 months ago

        Canada has no tax authority in China. You’re creating a boogieman. One suspects you have a personal stake in the continued easy inflow of foreign buyers into Vancouver’s RE market and are therefore motivated to sound false alarms. Seriously, why would you even care if foreign students can find housing in Vancouver? It’s like you see Vancouver as nothing more than a portal for immigration and foreign buyers. I would hope that Vancouver would strive to a higher purpose than serving merely as a welcome mat laid at Canada’s doorstep. Immigration and foreign investment are but two aspects of this vast country. Canada does not exist for the sole purpose of either.

      • Reply
        Joshua McIntyre 6 months ago

        They are not double taxed. The taxes you pay in a foreign country are factored into the Taxes you would pay in Canada. The difference might still be owed to Canada based on your income and taxes paid else where. It get’s complex, but you are not double taxed.

      • Reply
        Knotmi Reelnm 6 months ago

        Z, you mean a fair tax grab. These condos and houses aren’t for you. Go home and take dirty money.

  • Reply
    Ahmed 6 months ago

    The writing’s on the wall for the Canadian real estate market. Once loan issuance starts to taper, it’s all over for this market. Grab on to something, it’s going to be bumpy sailing from here.

    • Reply
      bluetheimpala 6 months ago

      It has already started…it is going to get really bad.

      • Reply
        Joe 6 months ago

        “After five straight months of acceleration, January saw Canadian existing home sales crash 14.5% – the biggest drop on record…

        Home prices rose 2,3% over the past 12 months, but it appears a sudden close-eye on Chinese buyers has hit the market hard as Toronto home sales crashed a stunning 27% from December (prices down 4.4% YoY) and Vancouver sales down 10.5% MoM (prices up 18.1% YoY).”

        https://www.zerohedge.com/news/2018-02-15/canadian-existing-home-sales-crash-january

        • Reply
          Bob 6 months ago

          An 18.1% YoY price increase is not a ‘crash’ on any planet.

          Tens of billions of dollars in monthly trade surplus. Tens of thousands of communists siphoning off the surplus cash. Not so many houses on this side of the pond. No government oversight on this side. No prying eyes on this side. Insatiable demand.

          Sell a nice family home over here and see who your prospective buyers are. Insatiable demand.

          • Brian 6 months ago

            May be the Federal government using the CRA and banks to please the Chinese Communist government by flushing out the Chinese citizen money launderers in order to enhance potential for a Canada-China trade treaty.

          • Yeah Right 6 months ago

            I think the 1300 detached homeowners in Vancouver would disagree with you on your insatiable demand from china statement Bob. https://www.zolo.ca/vancouver-real-estate/trends
            Put in perspective, that’s 80 less active listings than in Toronto. Unsold listings have been building in detached heavily for over a year now throughout the gvrd. Feb reports will be interesting.

    • Reply
      Investor 6 months ago

      CIBC can see the handwriting on the wall; they’re just taking cover – it’s not because they’re so disciplined.

      • Reply
        Gromit 6 months ago

        100% correct. I wonder how exposed CIBC “asset” base is to this? As a significant depositer there i know that CDIC caps off at $100k and even then collecting your CDIC is apparently a snails pace process and subject to ‘hair cuts’.

      • Reply
        Beh G. 6 months ago

        You hit the nail right on the head Investor.

  • Reply
    Condox 6 months ago

    Is curbing foreign demand the only motivation for CIBC? Can it be possible that they are afraid of making an uninsured bet on real estate because they are concerned with the current state of the bubbling market? I wonder if someone from the banking industry can give us some insight into other motivating factors because if I was a bank I’d be taking foreign money all day long especially at 35% down.

    • Reply
      Investor 6 months ago

      You hit it right on! 35% down doesn’t seem to be enough to cover their losses from whatever may be coming. We should all be concerned.

  • Reply
    queali 6 months ago

    Well banks like CIBC get to keep the 35% and the house when it hits the fan… Its a no lose scenario and they have been cashing in for some time already…

    • Reply
      Joshua McIntyre 6 months ago

      They can only keep the 35% if they resell the mortgaged property at its original purchase price. If prices dropped, say 50% they would lose 15% of the funds advanced (assuming the mortgage was recent with out much of the out standing balance paid down). It’s uninsured, so if the purchaser walks away from the property (this happened a lot in the US crash) the bank will take possession. Seeing as the bank is not in the business of owning houses, they will just dump it on the market. This causes serious downside pressure on housing prices.

      • Reply
        Gromit 6 months ago

        Actually the banks in the US did not ‘dump’ houses on the market they held them vacant for a very long time as they did not want to write down the value of the home that would accompany a sale at the true market value. What ended up happening is they bundled up many homes into packages and sold them to friends for pennies on the dollar.

  • Reply
    Cat 6 months ago

    Not sure but maybe under the new rules they have to stress test all mortgages not just domestic, which is good news.

  • Reply
    PF Chang 6 months ago

    What happens to everyone who bought already? Will they need to provide this documentation upon refinancing?

    • Reply
      Joshua McIntyre 6 months ago

      Not if you refinance with the same financial institution. If you are going to another, then yes will will need to qualify under the new B-20 rules.

      This way, when you can’t qualify under the new rules you can’t go to another institution and the one you are with can charge you a higher rate because you are stuck with them. It’s win for mortgage lenders.

      • Reply
        Insider 6 months ago

        That’s not correct! Everyone will now have to qualify based on B20. So if you are currently with CIBC for example, and you want to re-fin you will need to qualify based on “stress test”. And for pre-sales/builder completion, are also subject to B20 as of Jan 1st. So for example you put 20% down on a condo purchase last year, and now you want to apply for a mortgage, you will have to qualify based on current qualifying rate which is 5.14%, or negotiated rate +2%, whichever is higher.

      • Reply
        Vas Anton 6 months ago

        Josh, you are mistaken when you say borrowers do not need to provide any documentation upon refinancing if they stay with the same financial institution. You are confusing refinancing (the new stress test will be applied, regardless of whether you stay with your existing bank or not) with renewal (re-signing at maturity, without asking for new money, with your current bank).

    • Reply
      Insider 6 months ago

      Yes that’s correct. To refinance or to purchase you will need to meet B20 guidelines for foreign income and guidelines under “stress test”. Also this is for those who are PR in Canada and earning money overseas. For non residents no program exists. Non residents will have to make cash purchase or with private lender

    • Reply
      Beh G. 6 months ago

      On refinancing yes, you have to qualify based on B20. If you’re just renewing your mortgage with the same lender however you don’t “theoretically” have to qualify under the new rules.

      I say theoretically because it’s entirely at the lender’s discretion if they want to renew your mortgage (i.e. they don’t have an obligation to do so). This was of course not an issue when the market was going up – the higher the price the bigger cushion your lender had.

      But on the way down and particularly if the market slowdown gets much worse (as is the case in the 905 area with detached homes), there’s no incentive for your lender to take a risk with your mortgage at a 0.5% premium over a risk free US 10 year treasury especially with the Canadian dollar falling.

      In such a situation, the banks may and I suspect will gradually gravitate toward their published, rather than discounted rates to demand an extra premium for the risk. That would leave the borrowers with very little recourse for renewal if they don’t qualify under the new rules and are therefore unable to shop around.

  • Reply
    Cat 6 months ago

    Sold my house in March of last year didn’t see how they could go up any more took a chance.while I wait renting a house someone else paid 1.4 mil for.rent is 2400 .between what I could get for mine now and what I would pay for another I have earned at least 300 thousand. Read all your articles and comments .Thanks.

    • Reply
      Grizzly Gus 6 months ago

      I got out second week of April 2017. Believe renting is the way to go for at least the next 2-3 years. Looking at Toronto’s last crash as well as the US one from last decade. It looks like approximately a 6-7 year window from peak to trough. Mind you the proceeding booms were over a shorter time span. Anyway with both of those about 60% of the decline happened in the first 3 years, followed by a slower decline as the impact worked its way through. Depending on the state of the economy, I will take a chance catching the falling knife if the right property/location becomes available and if it looks like the annual declines are getting close to what i would be spending on rent for the year.

      • Reply
        sac 6 months ago

        Thats very good advice, Grizzly Gus. I will follow that too, been just trying to work on a formula to decide when to get in the market. It seems sound to buy if you are paying more in rent then what would the property value be after a year, so you wont be at a loss still.

        • Reply
          Professor of real estate 6 months ago

          So let’s do the hypothetical math scenario.
          April 2017:
          $500K mortgage , 2.50% interest rate , 30 years , monthly payment ($1977)
          (if you keep until April 2019) – the mortgage will be around $475K

          April 2017: sell house/condo and rent for 2 years and wait for 10% correction to jump back in. New date April 2019 to buy same place that is lower by 10%.

          April 2019:
          $450K mortgage , 4.0% interest rate, 30 years, monthly payment ($2140)
          saved $50K in house price reduction but you paid rent for 2 years ($2000×48) = 48K
          in the meantime.

          Summary: if you kept the house until April 2019 you would have $475K mortgage.
          If you sold April 2017 and jumped back in April 2019 – you would have $450K mortgage, higher monthly payments and you paid $48K for rent in the meantime. Also you had to move twice and pay a realtor once.

          I have no opinion. just looking at the numbers.

          • Grizzly Gus 6 months ago

            First off, I don’t think you are getting a 2.5% fixed anywhere today, and I doubt you will be able to get a 4% fixed in 2019. I would be terrified to have a variable rate right now.

            Second, even if I had a 2.5% fixed for the next 5 years where would that leave me upon renewal? In 2022 I would be about 450K in debt looking at what kind of rate?

            Third, that’s with only a 10% drop. I feel like I already would be getting 10% less if I were to sell my single detached home today. If all the market loses is 10% from peak I will have to eat my hat, I think a 30% drop would be a conservative starting point……………… but immigration, rich foreigners, land constraints!

            Lastly, due to the crazy price appreciation we have seen this decade (which you should know all about with your investments) my remaining mortgage was about 10% of the final sales price. If we fall back to earl/ mid 2016 prices I should be able to buy the same house and be mortgage free (allowing for RE agent and taxes)……… Straight cash homie!

          • Takanome 6 months ago

            Stop doing math, you suck at it.

            Also please let me know where you are getting your 30 year mortgages, I will check them out.

          • Professor of real estate 6 months ago

            I assumed 5 year fixed 30 year mortgages.

            I didn’t say home prices I am just looking at mortgages in this scenario.

            I was looking at peak april 2017 to future 2019 scenario.

            If you bought well before 2017 then you made great money. no doubt about it.

            Takanome why don’t you provide some info/data to help us out.

            I never regretted buying a property but I regretted many times selling a property.

          • Fiendish Thingy 6 months ago

            Professor, your math is inaccurate at best, more likely dishonest.

            Your inaccuracies:
            10% on the way up is not the same amount as 10% on the way down. It only takes a 33% decrease to erase a 50% appreciation in pr CE.

            Your omissions:
            Property taxes
            Homeowners insurance
            Strata fees
            Opportunity cost for missed investment

            Your likely inaccurate assumption:
            The market will only correct by 10%

    • Reply
      Beh G. 6 months ago

      We did the same exactly at the same time and for the same price… albeit we had an offer for $150k more 3 days before closing! It hurt a bit but we sold to a friend who insisted to buy despite our insistence not to sell to him because he was speculating with zero knowledge of the market and we told him specifically the market was about to crash 20%, which it did!

      Took the money and invested it into Spanish real estate at the trough and are now living in Spain. Price in this area (Alicante province) for a property that we consider equivalent to our old home about 1/3 to 1/4 , property taxes $750 per year (1/5th of what we were paying there), utility prices about 1/2, property insurance about 1/8, car insurance less than 1/2 and the rest of living expenses about 2/3 to 1/2 – the latter if you like drinking lots of vino! 😉

      Average household income where we are is about 20%-20% less than it is in Toronto so it becomes painfully clear very fast how much we were getting ripped off there, especially considering the way better infrastructure, healthcare, quality of life, clean air, more security/safety and better food and of course 320 days of sunshine. Property prices here are expected to hit the 2007 peaks in the next 4 to 5 years (i.e. solid 8% annual projected growth). No-brainer decision! 🙂

  • Reply
    Justin Thyme 6 months ago

    Methinks, behind the scenes, this has something to do with money laundering.

    Now, money used to get and pay for a mortgage has to be legit. Under the old guidelines, it would seem that dirty money could be laundered into clean asset holdings quite easily. Get a few multi-million dollar properties, with a mortgage, you have perhaps 20 years of continuing laundry, not just a one-shot deal.

    This would not only be pushed by the CRA, and by international police forces, but I suspect by China as well. Now, China has an official money trail they can follow. Could this signal a closer liaison between the CIBC, and other Canadian banks, and the Chinese state banks? The price they have to pay, to make inroads into China?

    But let us not forget, American ‘students’ are also ‘foreign buyers’, and I am sure Americans have not ignored this as a great money laundering scheme.

    • Reply
      Grizzly Gus 6 months ago

      Interesting thought!

    • Reply
      EO 6 months ago

      Fantastic point! Such an interesting theory which could be made stronger by below.

      “The Bank of Montreal has signed a new memorandum of understanding with China’s largest state-owned bank, Industrial and Commercial Bank of China Ltd. (ICBC), in an effort to expand its footprint in the world’s second largest economy.

      The new agreement will allow BMO and ICBC to cooperate on everything from asset management to corporate financing and trade in China and Canada.

      The deal was signed in November, but details were released publicly on Monday.”

      Also of note, ICBC set a new precedent in Canada when they were successful in suing one of its clients in BC and won trying to recoup money on a defaulted mortgage in China, which turned out to be given based on fraudulent information. The money from the mortgage in China was used to buy several really expensive properties in BC.

      And Trudeau has been pushing really hard to get close to China.

    • Reply
      bluetheimpala 6 months ago

      Good comment Justin. I thought you were a troll.
      I said this a few days ago…Xi is bringing back his capital. It is his, not the oligarchs he created…never forget that. Same with Putin..it is Moscow’s money, these billionaires are just baby sitting.

      China flirting with capitalism and the markets has failed. Growth is tepid and the government can’t spend anymore. I think Xi thought his oligarchs would work like Russia’s (or even India which has done a great job domestically) but once you get your money out, you get the hell out. That is clearly what is happening; none of the kitty is making it back. Now he has to have the state take over because he knows, while it is a long process, centralized planning will lead his people to greatness (I tend to agree). China cannot surpass the US by adopting capitalism; centralized planning got them this far so they need to fall back on this.

      Banks sharing info about Chinese foreigners. Canadian banks requiring paper trails (which they will no doubt share). More transparency. This is a call to Xi’s capital: come back now or in the next 12-24 months we’ll be coming for you.

      • Reply
        Bob 6 months ago

        “Xi is bringing back his capital”

        He might be trying to stem the outflow a little bit, but there is no evidence that he’s bringing any capital back. Have you seen any sales of properties they already own? None. They just sit. And hold.

        • Reply
          bluetheimpala 6 months ago

          Wait and see my friend. China doesn’t need capitalism to further its goals..the nation building they are doing is NOT via private investment but state backed infrastructure companies with decade long plans not pump and dumps so the current CEO can get a bonus and then piss off. China sees EVERYTHING as long term. Look at Africa and parts of Latin America. The Silk road it is building. Come on my man, open your eyes. As along as the US has the ‘red president’ in power for the next 7 years the Chinese will be able to carve out parts of the globe that were untouched and will be impossible to reverse.
          Trump is the ‘lame duck’ that China has been hoping for and Russia helped get into power knowing a weaker USA is good for China and by extension Russia.

          • Knotmi Reelnm 6 months ago

            Your description is better suited to Obama than Trump. Keep up with the latest developments.

      • Reply
        Alistair McLaughlin 6 months ago

        Steve Keen seems to think China is about to collapse under its own credit bubble. While I don’t agree with Keen’s solution to the private credit cycle problem (i.e. more government debt to replace the private debt) his theories on money creation, credit cycles and their inherent exhaustibility are as solid as anything I’ve seen out there.

        A return to heavy-handed central planning might well be the result of China’s pending credit implosion, but it won’t lead to greatness. They got as far as they did by adopting more open markets. They may be bumping up against their limits (reaching their “Minsky moment”) but a relapse into central planning isn’t going to help them push past it. Such a relapse, if and when it happens, will be all about preserving order and consolidating power. If it comes to that, economic growth will have taken a back seat.

        • Reply
          bluetheimpala 6 months ago

          Economic growth and global influence shouldn’t be confused…china holds most of the cards in terms of global production (plastics, composites, petroleum bases) and has a huge foothold in commodities.
          I hope you are right Alistair and I know you have much more knowledge on the subject but Trump is handing the world to Xi.

          • EO 6 months ago

            I too agree that China will implode due to it’s credit bubble. China’s middle class grew from 29 mil in 2000 to 420 mil in 2013. I think it is safe to assume that the Chinese middle class is using debt to fuel their consumption in the same way we are. The issue with China, imo, is that a good portion of this middle class has never experienced debt in the way they are today and it doesn’t take long to reach irrational exuberance fueled by this debt. The worst part about China’s system is that fraud is prevalent in their real estate market lending and it gets swept under the rug because everyone gets a piece of the pie. And their socially acceptable shadow banking system adds fuel to the fire. The Chinese are no different then Americans, or Canadians except that we know better because we’ve been through these cycles, China’s 400+ million middle class population has never experienced it, so when it’s going to come down on them, it will come down like a nuclear bomb. And if anyone thinks we are safe, think again. They borrow over there and bring it here. That’s where the 35% down payments come from.

          • Justin Thyme 6 months ago

            EO, just stop and think about your numbers. A middle class bigger than the entire population of America. It is the American middle class that is disappearing, not the Chinese. They now produce twice as many automobiles as does America.

            It is just wishful American-centric thinking that believes the Chinese economy is ever going to self-implode, when indeed it is the American economy that is self-imploding. Capitalism is failing America, not China. And America has no system to fall back on – no plan B.

            It is Marx, not Keen, who is correct. Capitalism can get an economy going, but it can not sustain it. Eventually, the quest for profit becomes counter-productive, and the quest for equalizing wealth takes over. There is a limit to growth, and when that happens, the trick is to change from growth to equality of distribution. One person with 100 fridges doesn’t need more fridges.

      • Reply
        Justin Thyme 6 months ago

        Blue, you think I am a TROLL?

        It is true that we may have differing views on China, among other topics, but they are both sound positions backed up by facts and figures. That’s what healthy debate is all about – differing viewpoints discussed openly and respectfully.

        And perhaps an outlier position thrown in to generate lateral thinking.

        But a TROLL? I am truly offended, and .. and… and…. and I will probably become even more a satirist.

      • Reply
        Justin Thyme 6 months ago

        Blue, India is another case in point which I have been following. They are equally as protective of the rupee as China is of the renminbi. Neither is freely convertible. India could turn out to be a diamond in the rough on the world economic stage, but first they have to get their internal sectarian divisionist policies in order. Their internal economy has to become coherent and cohesive, rather than compartmentalized. The other problem India needs to come to grips with, is the national zeitgeist against working for a corporation, as opposed to working for yourself in an individual proprietorship. There is this over-riding philosophy that only the lower class works for someone else. This limits the effective size of businesses, and the Indian economy and industry has had trouble reaching a critical mass size to compete globally. Their economy is the exact opposite if the Chinese economy – absolutely decentralized and fractured.

      • Reply
        Justin Thyme 6 months ago

        Blue, I agree that Xi is bringing something back to China. Where we differ, is that I think it is the foreign reserves that he is bringing back (greenback wealth), not renminbi wealth (which can not be taken out of China anyway). Methinks it is a very subtle, underhanded ploy to undermine and weaken the opposition. The more greenback wealth (foreign reserves) that is in China, and owned by the state, the less that is available for America to invest in productivity. Perhaps it is his intention to bleed America dry. Methinks Xi wants his state-controlled enterprises to ‘own’ and control the foreign investments, not the oligarchs. The weaker the Chinese oligarchs are outside of China, the stronger the Chinese state enterprises.

        I think he is just trying to eliminate the competition.

    • Reply
      C 6 months ago

      Methinks you had insight to the the Globe and Mail expose on fentanyl dealers and canadian mortgages before the rest of us did!!
      Or youre just really smart? Either way, good call!

  • Reply
    Common Man 6 months ago

    Very good news. Happy to know 🙂

  • Reply
    Brian 6 months ago

    About time! Level the playing field.

  • Reply
    CJ Ray 6 months ago

    Is that Cat from Michigan, formerly Niagara? Just a long shot.

  • Reply
    Mike 6 months ago

    Every bank should have to follow these restrictions immediately, not just CIBC.

    • Reply
      bluetheimpala 6 months ago

      They will/have…trust me. We have an banking syndicate here, no one does anything unilaterally unless it is little old BMO trying to build a mortgage portfolio in Ontario (what a dud!)

      • Reply
        Justin Thyme 6 months ago

        It may be a syndicate, but they are highly competitive within that syndicate. TD Canada Trust has more branches, and does more business, in the US than it does in Canada. They each have their own separate game plan for expansion outside of Canada.

  • Reply
    Professor of real estate 6 months ago

    This is all about money laundering. banks would love a customer that puts 35% down for home. This is CRA leaning on the banks – they have jurisdiction to do this and the banks are complying. Not a bad thing. Please don’t be too short sighted – these wealthy foreigners made many many canadians filthy rich for nothing. essentially transferring wealth to a generation of canadians who spread the wealth around to other canadians. not sustainable – most people here are waiting for a crash. These are exciting times in real estate investing. unfortunately all this regulation just makes getting mortgages for everyone much more difficult. Now it is all about rental market in my opinion. my strategy was to invest in detached houses (10 years ago) and then to eventually (with enough cash) get into small apartment buildings. so far it has worked very well.

  • Reply
    Jack 6 months ago

    That’s awful – I cant believe that foreign students were being given mortgages to buy Canadian property with no proof of income or background checks on sources of income, yet us canadians are forced to undergo all of that in order to buy a house in our country.

    I think the market has been pushed up by foreign buyers, and is over priced. I find that practice crooked because foreigners get a leg up on us to buy property that should rightfully belongs to Canadians. WTF is going on with politicians?? Hoping this is the beginning of the end for easy street to foreigner purchases, especially those who declare no income and pay no f’in taxes.

    • Reply
      Ray S 6 months ago

      no one was “given” anything. A mortgage has to be paid back. You can disagree that a person who cannot prove they can pay the mortage shouldn’t get one, but assuming anyone has been “given” anything is stupid.

  • Reply
    Cat 6 months ago

    So called professor of real estate.

    Your math is flawed and numbers are weak.but even if I use your numbers I’m up 20%.there are also expenses in owning taxes,maintenance, repairs.oh and I didn’t put my money under my mattress.

  • Reply
    CIBC backflips on “student mortgages” | Price Tags 6 months ago

    […] Via Jak King, a blow to those students wanting to buy multi-million dollar west-side Vancouver houses, via betterdwelling.com. […]

  • Reply
    jim 6 months ago

    Talent is leaving Canada in droves thanks to outstripping honest tax paying wages loosing to foreign capital and money laundering. I guess they’re starting to realize the overall organic health of the tax system is in jeopardy and the lemmings who keep this system afloat will no longer be sufficient.

    • Reply
      Justin Thyme 6 months ago

      Has this site become a target for American trolls and bots?

      Why do Americans think that the Canadian public is as gullible and is as prone to believe in false data as Americans are?

      It seems the number of posts herein that are trying to proselytize on American greatness is increasing. Who are they trying to convince, Americans or Canadians?

      I wish American troll bots would just leave us alone.

      • Reply
        Jim 6 months ago

        Actually, I’m Canadian living in one of these cities and I didn’t mention anything about America. Why do Canadians have to move to America? There are many other places in this world to relocate where wages are more in line with cost of living.

      • Reply
        Depth386 6 months ago

        Yeah Jim’s complaint is one of a disenfranchised Canadian.

        As for your obsession with Americans, in 2008/09 we laughed at them. I think their turn is coming right up.

  • Reply
    Davy 6 months ago

    Doesn’t China have capital outflow restrictions and caps? If so, would that be factored into mortgage eligibility, so that it wouldn’t matter how much money an offshore buyer made in China? The income available for the mortgage could be no higher than China’s capital outflow cap. I’m probably missing something here, so please chime in to correct me…

    • Reply
      Justin Thyme 6 months ago

      Remember, these policies apply not just to Chinese buyers, but to American buyers as well.

  • Reply
    Justin Thyme 6 months ago

    This blog has degenerated into senseless badgering and obfuscation of the facts.

    It has lost its focus, its relevance.

    No longer is it a discussion on the issues, but it is making an issue of the discussion,

  • Reply
    BC’s 2018 Budget Takes Aim At Vancouver Real Estate Speculators, Here’s Why | Better Dwelling 6 months ago

    […] Why the tax? BC has been seeing a number of low income households, in very pricey real estate. This has made some suspicious that international income is not being declared by many homeowners. The rule comes after one of Canada’s largest banks has decided to crack down on a similar issue, when issuing mortgages. […]

  • Reply
    Aaron 3 months ago

    Doesn’t make sense for students.

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