CMHC’s 2011 Canadian Housing Observer is out.
It’s stuffed with mortgage and housing stats, although most are from 2010 so it’s not as current as we’d hope.
Here are some of its mortgage-related highlights (our comments in italics)…
- Mortgages comprise 68% of Canadians’ total debt. (Interestingly, this is down from the peak of 75% in 1993—even though home prices have risen 137% since then. Canadians have obviously racked up debt in many other ways.)
- Housing-related spending was more than 1/5 of Canada’s gross domestic product in 2010, or about $330 billion.
(If demand for housing drops materially, or government policies somehow derail the market, Canadians will quickly feel the economic pain.) - Lenders are using deposits less as a source of mortgage funding. 71.2% of mortgage funds came from deposits in 2006. That’s dropped to 58.9% as of CMHC’s latest data from 14 months ago.
(This decrease has been offset by greater securitization, which lenders relied on for 27% of mortgages in 2010. That said, deposits “remain the cheapest” source of mortgage funding, says CMHC.) - Canada’s Big 6 banks held ~55% of total mortgage credit outstanding.
(That’s down from 64% in 2002.) - Residential mortgages comprise 20% of total bank assets in Canada.
- Seniors will account for 24% of Canada’s population by 2036, say forecasts. That’s up from about 14% now.
(The greying population will clearly boost demand for senior housing, but also have implications for the demand on affordable private housing and condos. To the extent that those aged 65+ will downsize, a burgeoning seniors population could also put more detached single-family homes on the market.)
Trivia question: Which part of Canada had the highest average rents for a 2-bedroom apartment in 2010?
If you’re thinking Vancouver, you’re close. It’s # 3 at $1,195 per month, according to survey data.*
Toronto? Nope. It’s # 4 at $1,123 per month.
According to CMHC’s report, the most expensive rental market in Canada was Iqaluit, Nunavut at $2,365 per month. Seems they have a “slight” housing supply problem up there.
Yellowknife was the second priciest at $1,486 per month.
* This data is based on a survey in CMHC’s 2011 Canadian Housing Observer and does not include all cities in Canada.
Rob McLister, CMT
Last modified: April 29, 2014
“Canada’s Big 6 banks held ~55% of total mortgage credit outstanding.”
That’s encouraging news which I’m sure isn’t news to these banks, hence the increasingly restrictive mortgages they have been putting out.
“Seniors will account for 24% of Canada’s population by 2036, say forecasts. That’s up from about 14% now.”
This is bound to create a lot of headaches, not just for OAS/GIS which are funded from tax revenues but also cause a shift in the housing market where demand for smaller houses and condos would increase and keep prices high. With more Baby Boomers heading into their retirement with mortgage debt, it’s quite plausible that many would try to cut their mortgage debt by selling their bigger home and moving into a smaller place with a smaller mortgage. But those who have enough savings could be looking to buy recreational properties, thus pushing up demand in that sector.
Securitization would be greater if CMHC did not impose such restrictive and unecessary allocation limits. The public would then enjoy more competition and even lower rates.