While mortgages in Ottawa have been heavily scrutinized lately, our mortgage market has been often compared to that of Australia’s. And while these comparisons have largely related to mortgage insurance in the two countries, now it seems there’s another thing that Toronto mortgage brokers can learn from Australia. That’s how to talk to speak to foreign buyers.
Tom Mak, a Chinese native but who now calls Australia home of both his residence and his mortgage brokerage, says that foreign buyers, especially those in Asia, aren’t as familiar with the concept of mortgage brokers as they are in Australia, United States, and Canada. Because of this, they shy away from using mortgage brokers, simply because they don’t understand how they work.
Mak says that when he first started with his brokerage, nearly all of their clients were homeowners and homebuyers in Australia. Seeing a need, he began to reach out to the Asian community and the more he did, the more found they were interested in his services.
“It often takes me a while just to explain what I do and why I won’t be charging them a fee,” he told Australian Broker Online.
With major markets like Toronto and Vancouver being scooped up more and more by foreign buyers and investors, this advice might be more pertinent now than ever. But then again, maybe not. When you consider data from Statistics Canada, it’s clear that foreign buyers are only going to continue to make up a larger segment of our market.
According to Stats Can, 28 per cent of Canada’s population will be foreign-born by the year 2031. This is higher than any other year in the 20th century. Of this group, more than half – 55 per cent – will be Asian-born. Stats Can also reports that the Canadian South Asian population will grow to 4.1 million, up from the 1.3 million that called Canada home in 2006. The Chinese population, which sits at a current 1.3 million, is going to increase to 3 million.
Mak is currently speaking with professionals and authorities in the Australian mortgage broker industry to determine how they can better educate foreign buyers, and anyone seeking more information about mortgage brokers, on exactly what they do and how they provide their services. And although he did not mention Canada specifically, he did say he thought it was something other countries could do as well.
Combined with the data from Stats Can, it’s not hard to see why it might be important.