This Week’s Top Stories: Canadian Mortgage Debt Is Rising Fast, Inventory Falls In Major Real Estate Markets

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

Canadian Real Estate

Canadian Mortgage Credit Growth Is Rapidly Accelerating, While Consumer Credit Slows
Canadian household debt growth is accelerating once again, but only in one segment. The balance of debt reached $2.27 trillion in December, up 4.2% from last year. Mortgage debt is behind the acceleration, representing $1.63 trillion of the debt – up 4.9% from last year. Consumer debt represents the other $641 billion, up just 2.4% from a year before. When adjusted for inflation, the consumer debt is getting close to zero annual growth. Mortgage debt is entirely responsible for the acceleration of household debt growth.
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Canada’s First-Time Home Buyer Incentive Receives Cold Reception
Canada’s First-Time Home Buyer Incentive (FTHBI) is receiving a cool reception. The program delivered just $51.3 million in funds from September 2 to December 9, 2019. Quebec residents made use of it the most, representing $18.74 million of those funds. Alberta had the second largest segment of users, representing $16.30 million of the funds. Just those two provinces represented more than half of all funds disbursed.
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Canadian Mortgage Credit Rips To Highest Growth In Nearly 2 Years
Canadian mortgage credit is growing at the fastest pace in nearly 3 years. The outstanding balance reached $1.63 trillion in December, up 4.9% from last year. Not only is this a new all-time high, the 12-month rate of growth is also large. Mortgage credit growth is rising at almost the pace it was prior to the B-20 Guidelines.
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Only A Third Of Applications For Canada’s First-Time Buyer Incentive Were In Major Cities
The FTHBI was supposed to help make it cheaper to live, but it may have had the opposite impact. Very few applications for the program are in Canada’s largest markets. Only a third of the total actually, despite more than half of the population residing in these cites.
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Toronto Real Estate

Toronto Real Estate Sales And Price Growth Are Back Above Pre-B-20 Levels
Toronto real estate sales are rising quickly, at a time when inventory is scarce. TRREB reported 4,581 sales in January, up 14.27% from last year. Active listings fell to 7,772 in the same month, down 35.03% from last year. Sales are 6.09% higher than the 5-year median volume for the month. Active listings are 33% below the 5-year median volume for the month. Winter months are prone to distortion, so there may be inventory improvements as the year goes on. However, last month was a very tight market – even by historic standards.
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Vancouver Real Estate

Vancouver Real Estate Prices Stabilize As Inventory Drops
Vancouver real estate prices are seeing losses slow, as inventory makes a sharp drop. REBGV reports the price of a typical home reached $1,008,700 in January, down 1.2% from last year. There were 8,617 active listings in the month, down 20.3% from a year before. Inventory was 13.7% lower than the 10-year average for January, which helps explain why prices are starting to firm up. The 12-month rate of decline was the smallest since November 2018.
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