The Latest in Mortgage News: Home Vacancy Rates Skyrocket
Tens of Thousands of Empty Homes in Canadian Cities
There’s an empty house problem in this country—1.34 million empty and temporarily occupied homes to be exact, with 66,000 in Toronto, 64,000 in Montreal and 25,000 in Vancouver.
And the main culprits behind these high vacancy numbers are investor speculation and short-term rentals, according to a new report from Point2Homes.
Decreasing populations and fluctuations in local economies are contributing factors as well.
The following big cities saw the largest increases in their vacancy rates:
The national vacancy rate was at 8.7% as of 2016 (the latest data available), up from 8.4% in 2006 and 7.8% in 2001.
Street Capital Acquisition Still on Track
The process towards RFA Capital’s previously announced acquisition of Street Capital continues to make progress as it completes the required regulatory approval process.
Earlier this month, Street Capital shareholders voted in favour of the deal, which will see RFA Capital purchase all Street Capital shares at a cost of $0.68 a share.
“This announcement brings us one step closer to closing the transaction with RFA, which delivers several benefits to Street Capital, its partners, employees and clients,” said Street Capital CEO Duncan Hannay.
He said the completion of the acquisition will provide the lender with up to $5 billion in new mortgage funding, allow for the expansion of its Street Solutions program, as well as the rollout of new products, capabilities and technologies.
Earlier this week, the deal also received a final order from the Ontario Superior Court of Justice approving its statutory plan of arrangement.
Scotiabank CEO: No Change Needed to Mortgage Stress Test
The head of Canada’s third-largest bank says the B-20 mortgage stress test that took effect in 2018 should not be changed.
“B-20 and the mortgage market—in terms of the qualifying rate —has had its intended impact,” Bank of Nova Scotia CEO Brian Porter told BNN Bloomberg. “…real estate markets in Canada—Vancouver and Toronto—are in balance and that’s a good thing.”
He added Canadian consumers have been “pretty shrewd” in the financial choices they have been making, including whether they go fixed or variable for their mortgages.
“So, I wouldn’t be doing any tweaking [to B-20] right now, but the government has the ability to do that over time.”
Which Canadians Have the Highest Credit Scores?
Residents of Vancouver and Victoria have among the highest home prices in the country, but they also boast Canada’s highest credit scores.
A recent report from Equifax and the Canada Mortgage and Housing Corporation found residents in Victoria have the highest credit scores of all, at 780, while Vancouverites place a close second at 776 and Calgarians behind them at 765.
“B.C.-wide the economy has been very strong over the past few years,” CMHC’s Eric Bond told CTV News. “When houses are more expensive, you have to take out a larger loan, and it’s only people who have higher scores who can qualify to take out larger loans.”
Here are the average credit scores in other major cities:
St. John’s (761)
Vancouver’s Luxury Housing Market the Worst-Performing in the World
Vancouver’s luxury market ranked last in a global performance survey of the world’s largest luxury housing markets.
According to Knight Frank’s Prime Global Cities Index, Vancouver’s luxury market was one of just 11 markets to see a price decline in Q2 (-13.6%), earning it a 46th-place ranking out of 46 markets.
Toronto, the only other Canadian city tracked by the index, saw its luxury house prices rise 3.8% compared to last year. Berlin topped the list, with annual price growth of 12.7%.