This Week’s Top Stories: Canadian Home Buyers With Small Down Payments Rise, While Toronto Condo Prices Slip Lower

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

Canadian Real Estate

Canadian Homebuyers With Small Down Payments Grows For The First Time In Years

Insured mortgage credit, for those with smaller down payments, increased for the first time in years. The balance of insured mortgages reached $476.53 billion in Q2 2020, up 0.07% from last year. The balance of mortgages is $785.17 billion, up 11.04% from last year. Insured mortgages may not be seeing much growth, but this is the first growth since 2017. Uninsured mortgage growth is at the lowest level since that year as well. Borrowers with small down payments are accelerating, but those with large ones are decelerating.

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Understanding Canada’s Record Home Sales Last Month, And Why It’s Likely To Continue

Canadian real estate sales are printing record highs, and the pent-up demand is behind the trend. CREA reported 58,645 sales in August, up 33.5% from the same month last year. It may be perplexing, but it’s easy to understand if you view monthly sales overlaid by years. The spring delays due to the pandemic have shifted into the Summer. This has resulted in an odd comparison period, likely to persist for at least another month.

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Canadian Household Debt To Income Temporarily Plummets Due To Government Support

Canadian debt problems seemed to be getting better when the household debt to income fell, but a note from Stat Can clarified. The household debt to income ratio dropped to 158.21% in Q2 2020, down 9.84% from last year. The drop made the ratio the lowest level in over a decade. While it may have appeared Canadians paid off debt, the balance of very few segments of credit fell. Stat Can clarifies that the rise has to do with a flood of government support during the pandemic, increasing the lowest incomes. The rise helped to push incomes higher temporarily. As government supports fade in the coming months, the ratio is expected to rise once again. 

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Canadian Immigration Resumes Big Declines, As Permanent Resident Numbers Plummet

Canadian real estate prices are rising, but fundamentals have been falling faster. There were only 13,645 permanent residents admitted in July, down 62.73% from last year. Year-to-date the country has admitted just 220,500 people, down 38.25% from last year. June had shown some signs of improvement, but this faded once again by July.

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Canadian Seniors Have Racked Up Over $4.3 Billion In Reverse Mortgage Debt

Canadian seniors have slowed their home equity binge, but the debt is still growing fast. The balance of reverse mortgage debt reached $4.3 billion in July, up 13.63% from the same month last year. The balance is now at a new all-time high, but growth has shrunk considerably from peak. Even with smaller growth, the balance is rising at twice the rate of conventional mortgages.

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Toronto Real Estate

Toronto Condo Prices Have Fallen Over $12,000 From Peak, Despite Booming Sales

Toronto real estate is very busy these days, but a rise in listings is pushing condo prices lower. The price of a typical condo apartment across TRREB reached $592,900 in August, down $8,400 from the peak in the Spring. In the City of Toronto, the typical price is now $621,200, down $12,400 from the all time high a few months ago. Both measurements showed peak growth at the onset of the pandemic, falling since. This is a very different trend from detached prices.

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