Here’s our latest recap of Canadian mortgage and real estate news.

This week we look at:

  • The latest housing affordability report, which came out with fairly predictable results
  • How the post-OSFI stress test bump in business for credit unions may not be materializing
  • What HomEquity’s 2017 originations data says about the trend towards reverse mortgages
  • And we’ll tell you which independent mortgage brokerage has just expanded into Quebec.

 

Vancouver Ranked Canada’s Least Affordable City; Saint John the Most Affordable

Surging home prices have pushed homeownership out of reach for many in some of the country’s hottest markets, but nowhere quite as much as Vancouver.

The West Coast city ranked as the least affordable housing market in Canada, according to a recent report from Zoocasa. The rankings were based on each city’s price-to-income ratio, which calculates how long it would take a homeowner to pay for their home using 100 per cent of their annual income. Vancouver’s price-to-income ratio was a staggering 28, based on an average home price of 1,071,800.

The next least affordable markets are: Fraser Valley: 25 (avg. home price of $795,100); Greater Toronto Area: 19 (avg. home price of $751,700); Okanagan Mainland: 18 (avg. home price of $509,545); Victoria: 17 (avg. home price of $642,800); and Hamilton: 15 (avg. home price of $552,661).

Canada’s most affordable markets are: Saint John: 4 (avg. home price of $171,596); Greater Moncton: 4 (avg. home price of $174,800); Trois Rivières: 4 (avg. home price of $153,951); and Fredericton: 5 (avg. home price of $179,981).

 

Alternative Lenders Not Seeing Expected Post-OSFI Rules Boost

The Globe and Mail ran a piece over the weekend quoting the heads of some large credit unions who say they haven’t seen the anticipated boost in business following the January 1 implementation of OSFI’s new mortgage rules.

The new mortgage stress-test requirement for banks and other federally regulated financial institutions was expected to drive many consumers—who could no longer qualify under the new rules—to credit unions and other alternative lenders.

But that hasn’t transpired, according to the article.

Alterna Savings & Credit Union CEO Rob Paterson told the Globe his credit union is actually seeing a softening in the market, with business down slightly from the previous year. “What the Big Five [banks] are trying to do is talk to [their clients] about ways that they can meet the higher hurdle,” he was quoted as saying.

Meanwhile, Martha Durdin, CEO of the Canadian Credit Union Association, told the paper that credit unions are taking a conservative approach about taking on new clients. “Brokers may be pushing applicants our way, but that doesn’t mean we are writing more business,” she said.

 

TMG The Mortgage Group Expands into Quebec

TMG The Mortgage Group, Canada’s largest independent mortgage brokerage, officially started its Quebec operations today.

The company will operate in the province as Le Groupe Hypothécaire TMG, making it a truly national brokerage now that it operates in all 10 provinces.

The expansion is being headed by new Vice President for Quebec, Claude Girard. Girard brings with him 30 years of financial industry experience, the last eight of which as Assistant Vice-President for Laurentian Bank.

Girard is also no stranger to the mortgage community, as he is currently serving his second consecutive term as the Quebec representative on the Mortgage Professionals Canada board of directors.

 

HomEquity Results Show Canadians Embracing Reverse Mortgages

HomEquity Bank released its 2017 reverse mortgage originations data for 2017, which totalled $608 million. This was up 32.5 per cent from the year before.

HomEquity says the increase is being driven by a growing need by consumers to finance their retirement in new ways. But the bank says the growth was also propelled by its partnership with brokers, noting that brokers were the fastest growing referral source, up 55 per cent from 2016.

“The sustained strength of Canada’s real estate market has increased the confidence of Canadian homeowners in reverse mortgages,” said HomEquity Bank President and CEO Steven Ranson. “That means proactive equity release is a more attractive solution than ever for Canadians planning for retirement.”