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This Week’s Top Stories: Canada Is Seeing Mortgages To Highly Indebted Borrowers Rise, and Condo Price Volatility Appears

Time for your cheat sheet on this week’s most important stories.

Canadian Real Estate

Mortgages To Highly Indebted Borrowers Rises To The Highest Level Since B-20
Canada saw a big drop in lending to highly indebted borrowers after B-20 Guidelines… now it’s reversing. About 17.5% of mortgages in Q4 2019 went to people borrowing over 450% of their income. We’re not back to the peak of 20% of mortgages, reached in Q3 2017. However, this is the highest percent since Q4 2017 – the last quarter before new lending guidelines.
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Canadian Seniors Now Owe Almost $4 Billion In Reverse Mortgage Debt
More Canadian seniors are tapping their home equity for retirement income, but growth is slowing. The balance of the reverse mortgage debt hit $3.98 billion in November, up 14.09% from last year. It’s still a very large rate of growth – possibly the fastest growing segment of debt. However, this is the lowest rate of growth for reverse mortgages since February 2016. Yes, it had to slow down to 3x the growth rate of regular mortgage debt.
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Canadian Condo Prices Are Rising And Falling Faster Than Houses
Canadian condo prices are the fastest rising, and fastest falling, home prices in the country according to Stat Cana. Condo prices increased 0.54% in Q4 2019, and are up 1.91% from a year before. Breaking that down, resales condo apartments saw prices rise 1.4% in the quarter, and up 3.68% from a year before. New condo apartments however, fell 0.84% in the quarter, and are down 0.93% from a year before. All of the condo apartment price increase is due to resales, whereas new condos are falling very quickly.
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Canadian Credit Growth Falls To Lowest Level Since 2010, As Businesses Cool On Debt
Canadian businesses are stepping back from debt, while households are seeing accelerated growth. Institutional lenders held $4.50 trillion in outstanding debt in November, up 4.41% from last year. Household credit represented $2.25 trillion of the total, up 3.88% from last year. Business credit represented the other $2.24 trillion, up 4.93% from last year. Household credit growth has been accelerating, while business credit growth is slowing – an unusual dynamic that doesn’t typically persist long.
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Toronto Real Estate

Toronto Condo Inventory Fell To The Lowest Level In At Least 10 Years
Toronto condo apartments are seeing a normal amount of sales, with very low inventory. TREB reported 1,255 sales in December, up 5.91% from last year. In terms of inventory, there was only 1,660 active listings in December, down 29.39% from a year before. The number of sales is around the 5-year median volume for the month. Active listings however, are the lowest for December in at least a decade.
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Vancouver Real Estate

Greater Vancouver Condo Sales Rip Over 96% Higher… Prices Still Fall
Greater Vancouver condo sales made a big increase from last year, but prices still fell. REGBV reported 1,053 condo apartment sales in December, up 96.8% from last year. The price of a typical condo reached $656,700 in December, down 2.7% from last year. The year-over-year declines in prices are smaller than in previous months, but so far they’re still declines.
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