Canada

Canadian Mortgage Lending Just Had One of the Biggest Months Ever

Canadian home buyers weren’t shy about borrowing towards the end of last year. Bank of Canada (BoC) data shows a big increase in mortgage credit issued in November. The traditionally slow month, was actually one of the biggest in years.

Canadians Borrowed Over $37 Billion In New Mortgage Debt In The Month

New mortgage lending reached a record amount for the month of November. Borrowers took out $37.94 billion in mortgage debt in November, down 6.10% from a month before. Compared to last year, the amount is now 20.79% higher than a year before. The dollar amount is the largest going back to at least 2013. It’s also twice the amount borrowed just five years ago.

Canadian New Mortgage Lending

The monthly dollar volume for residential mortgage funds advanced by institutional lenders.

Source: Bank of Canada, Better Dwelling.

The growth is lower than the month before, but still one of the largest for the month. The 20.79% 12-month increase in November, is the largest for the month since 2014. Some of this has to do with buyers delayed in the first half of the year. When looking at it longer term, it’s a little more balanced. But only a little.

Canadian New Mortgage Lending Annual Change

The 12-month change in monthly dollar volume for residential mortgage funds advanced by institutional lenders.

Source: Bank of Canada, Better Dwelling.

Strong Mortgage Growth, Even When Averaged With A Weak Start

The average lending that occurred is very strong, but not as outrageous as comparing just November. The 12-month monthly average works out to $33.56 billion in November, up 1.65% from the month before. Compared to last year, this works out 9.32% higher. Big growth, but it highlights the delayed demand skew.

Canadian New Mortgage Lending – Moving Average

The 12-month simple moving average for monthly dollar volume on residential mortgage funds advanced by institutional lenders.

Source: Bank of Canada, Better Dwelling.

There is acceleration of growth, even by looking at a monthly moving average. Using a monthly moving average, this would still be the strongest 12-month increase since 2016. Growth is unmistakably accelerating.

Canadian New Mortgage Lending – Moving Average Change

The 12-month simple moving average for monthly dollar volume on residential mortgage funds advanced by institutional lenders.

Source: Bank of Canada, Better Dwelling.

Canadian mortgage lending is once again growing very quickly, any way the numbers are cut. Prices and sales have both been rising on a national level, which explains the rise. Both of those are being driven by a combination of delayed demand, lower rates, demand inducement schemes, and FOMO from tight supply.

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