This Week’s Top Stories: Canadian Banks Prepare For Household Vulnerabilities, As Real Estate Debt Tops Record High

Time for your weekly cheat sheet on this week’s top stories.

Canadian Real Estate

Canadian Mortgage Debt Hits A New Record, $1.56 Trillion Outstanding
Canadian mortgage debt reached a new all-time high. There was over $1.56 trillion in mortgage debt outstanding in April, up 3.2% from last year. While there is some growth, it’s extremely low compared to historic numbers. The annualized short-term trend shows a mild, to flat future for the pace of growth as well.
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Canadian Reverse Mortgage Debt Makes Largest Jump Since October
Canadian seniors are turning to reverse mortgages to tap home equity in retirement. The balance of reverse mortgage debt reached $3.62 billion in March, up 28.37% from the year before. The annual rate of growth is slowing, but is still very large. While the total balance is small relative to other segments, it may be the fastest growing in Canada.
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Canadian Regulators Ask Banks To Put Aside 30% More Rainy Day Capital
For the second time in a year, Canada’s bank regulators are asking the Big Six to prepare for an economic downturn. The mandatory domestic stability buffers (DSB) will increase to 2.00% this fall, an increase of 33.33% from last year. Regulators are seeing financial vulnerabilities linger and grow, and want banks to prepare. Don’t worry,  your bank will be fine – it’s preparing for famine. Though you might want to take a moment and consider if you’re the issue they’re preparing for.
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Canadian Household Debt Tops $2.18 Trillion, Makes Biggest Jump Since December
The balance of household debt held by institutional lenders reached a new high. The balance hit $2.18 trillion in April, up 3.32% from last year. The balance is growing, but still just off of a multi-decade low for growth. Low growth on a large pile always leaves the question, “is this the top?” An important question to ask for a debt fueled economy like Canada.
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Toronto Real Estate

Toronto Real Estate Sales Jump Higher, Board Notes Still Below 10 Year Average
Toronto real estate sales made a big climb, but it still fell short of historic norms according to the board. The price of a typical home in Greater Toronto reached $794,800 in May, up 3.11% from last year. TREB reported there was 9,989 sales in the month, up 18.88% from last year. The board also noted, while this is a major improvement, it’s still below the 10 year average. This is the second fewest sales since 2010.
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Vancouver Real Estate

Vancouver Real Estate Prices Drop Almost $100k In Value In Less Than A Year
Greater Vancouver real estate printed another rough month, with all three major indicators deteriorating. The price of a typical home reached $1,006,400 in May, down 8.9% from last year. Sales fell to 2,683 in the month, down 6.9% from last year – a 19 year low. Inventory climbed to 14,685 units for sale, up 30.04% from last year. Bad news for homeowners, but at least if you’re in the market – things are getting more affordable.
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