Time for your cheat sheet on this week’s most important stories.
Canadian Real Estate
Bank Of Canada: Mortgages In Arrears Expected To Triple, But It Could Be Worse
The Bank of Canada expects mortgages in arrears will rise, but policy measures helped contain the surge. The BoC expected mortgages in arrears to rise 8x by the end of the year. With new policy measures like widespread deferrals, it will only rise 3x and not until Q3 2021. The lowered arrears rate allows a more orderly sell off, helping more people to dispose of distressed assets without falling into arrears. Of course, people need to actually take advantage of that by selling.
Canadian Real Estate Prices Forecasted To Rise 12%… Or Drop Over 30%
Forecasts for Canadian real estate prices are coming in, and they’re all over the place. The most ambitious was from TD bank, estimating prices will rise 12% over the next two years. On the other side of the spectrum was Moody’s, which is forecasting prices could drop up to 30%. Guess which one thinks an impact to the labour market would impact prices, and which one doesn’t?
Canada’s Debt Relief Pauses Insolvencies, But Still Biggest Year Since 2010
Insolvencies are rising to multi-year highs, but growth is slowing down. There were 141,757 insolvencies in the 12-months ending in March, up 8.7% from last year. It was a drop in growth, but still the highest level for a year ending in the month since 2010. Experts believe the pause is due to recently implemented financial relief measures, and this is just a pause.
Canadian Household Debt Hits $2.28 Trillion, As Mortgage Growth Further Accelerates
Household debt is growing very quickly once again, but not for the reason it normally does. The balance of household debt reached $2.28 trillion in March, up 4.6% from last year. The growth is normally a sign of consumer confidence. However, this time it may have to do with the number of people no longer paying down their mortgage. Over one in ten mortgages are now on deferrals.
Toronto Real Estate
Toronto Detached Homes See Median Sale Price Fall Below A Million
Toronto detached real estate prices are falling. The median sale price across the board fell to $858,000 in April, down 1.37% from last year. In the City of Toronto it fell to $978,000, down 6.85% from a year before. More than half of all detached homes are now being sold 15% below the benchmark price.
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