This Week’s Top Stories: Canadian Banks See Decline In Mortgage Share, and Toronto and Vancouver See Sales Slow

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

Canadian Real Estate

Canada’s Big 5 Banks Lose Mortgage Market Share… Kind Of
Canada’s Big 5 banks lost market share last year, but are still up over the long run. In 2018, the Big 5 lost 2.7 points of market share, holding 72.6% of total mortgage values. Private lenders were one of the biggest gainers of that share, picking up 0.8 of those points – just under a third of market given up. Analysts attribute the drop to OSFI rules, which require banks to “stress test” borrowers.

Except this trend that started before regulation changes. Teranet crunched the numbers, looking at Ontario’s lender market share to 2012. Turns out the Big 5 gained 0.1 points of market share over the six year span. More interesting is private lenders grew 2.3 points over that period. Private lending growth accelerated recently, but was showing steady growth prior. It’s less a reflection of a response to regulations, as it is one of Canada’s increasing appetite for risk.
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Canadian Mortgage Growth Prints Slowest January Since 1983
The balance of outstanding mortgage credit continues to slow in growth. The balance stood at $1.547 trillion in January, up 3.2% from the same month last year. This is the slowest January for annual growth since 1983. That’s not exactly a boasting point.
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Canadian Household Debt Tops $2.16 Trillion, Slowest January Growth Since 1983
Canadians have a huge debt pile, but the annual pace of growth is starting to slow. The balance of household debt hit $2.16 trillion in January, up 3.12% from last year. It’s still growing, but it held the same pace as one month before. The month before represented the slowest pace of growth since 1983.
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Canadian Banks Hold Less Mortgages Than A Year Before, For The First-Time Ever
Canada’s largest banks have less mortgages for the first time ever. The CBA reported there were 4,755,951 mortgages as of October 2018, down 0.3% from the year before. The decline sounds small, but is significant since it’s the first one ever.
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Toronto Real Estate

Toronto Real Estates Has The Worst February Sales Since 2009
Toronto real estate prices climbed a couple of points, but sales dropped to a multi-year low. TREB reported the price of a typical home hit $767,800 in February, up 2.35% from last year. Sales fell to 5,025, down 2.38% from last year. That’s less than stellar when you realize price gains are slowing, and sales are at a multi-year low.
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Vancouver Real Estate

Greater Vancouver Real Estate Sees Biggest Price Drop And Fewest Sales Since 2009
Greater Vancouver real estate is seeing prices and sales drop. REBGV reported the typical home across the region cost $1,016,600 in February, down 6.1% from last year. Sales fell to 1,484 sales, down 32.8% from last year. The price decline is the largest since 2009, and ditto for sales.
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  • Jupiter 5 years ago

    I read a really good analysis in one of the YouTube comments.

    Basically If you calculate the total area of gta and assume only 30% is used for residentials multiply by average floors of residential buildings 2.5. divide that by GTA’s population you will find there is enough land for every family of 4 to build a 33,000 square foot house, a typical 6 bed room large detach is only 3,000 square feet. Or simply put we have 10x amount of land for everyone to build a mansion.

    Also if you consider housing starts and old boomers dieing there is a 40% over supply of housing coming to market in 2019.

    We need to let the housing price is GTA come down at least 40%. That will only be back to 2014 levels. There is no fundamental supporting these price levels.

  • ken 5 years ago

    Developers are ALWAYS the bagholders of a crash. So much so that the investment industry has a term they call the “Skyscraper Index” which is when some developer somewhere in the world announces he is building the new highest skyscraper in the world.

    This always comes after a long boom time where the developers are feeling overconfident and no longer even do much risk assessment. But I would add that some of this debt is not due strictly to actual developments, but developers who have been unable to sell existing projects and are using debt to stay afloat.

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