Time for your weekly cheat sheet on this week’s most important stories.
Canadian Real Estate
Toronto And Vancouver Real Estate See Mortgage Delinquencies Start To Climb
Mortgage delinquencies in Toronto and Vancouver are off an of all-time low, especially on larger loans. Delinquencies on mortgages over $400,000 at origination in Toronto CMA increased 28.75% from the low observed in Q4 2017. In Vancouver, the same segment of loans increased 11.11% from the low observed in Q2 2018. The overall rate of delinquencies remains relatively small, but these numbers aren’t heading in the right direction.
Canadian Borrowing Rates Are Climbing, But Growth Is Slowing
The typical rate consumers pay to borrow from institutional lenders is climbing. The typical rate on a household loan reached 3.99% on February 15th, up 11.14% from a year before. This is the fifth week it’s stalled at this level, the highest number since 2009. Prior to 2016, it was very rare for the rate to stall this long – higher or lower.
The Dollar Volume Of Canadian Real Estate Sales Off To A Weak Start In 2019
Declines in real estate sales are putting a drag on dollar volumes. CREA reported $10.9 billion in sales in January, down 9.4% from last year. The declines dragged the month to the second weakest number in at least 3 years. The weakest was this past December. The BC market reported some of the worst numbers, leading the market lower.
Canada’s Largest Real Estate Markets See Mortgage And HELOC Payments Soar
Canada’s largest real estate markets are seeing homeowners hit with larger mortgage and HELOC payments. Toronto households with a mortgage are paying an average $1,710 in Q3 2018, up 5.95% from a year before. Vancouver is up to $1,734, up 6.34% from same quarter last year. Montreal was a more conservative $1,081, up 3.44% from the year before. A similar trend was also observed with HELOC payments, which had an even higher pace of growth.
Toronto Real Estate
Only 1 In 10 New Homes In Greater Toronto Were Bought Last Month
Greater Toronto new home sales are cooling as inventory keeps rising. There were only 1,362 sales in January, up 14% from the year before. That sounds good, until you realize last year had the fewest sales since 2009. A major difference this time is inventory stood at 15,530 new homes in January, up a massive 32% from last year. The result is a sales to listings ratio of just 8.77%, meaning prices are too high for the rate of absorption. If sales don’t pick up soon, expect the excess inventory to push new home prices lower.
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