This Week’s Top Stories: Toronto And Vancouver Real Estate Sales Soar, And Borrowing Rates Are On The Decline
Canadian Real Estate
CMHC: Toronto Real Estate “Highly” Vulnerable, Vancouver Stabilizing
Warning signs exist for Canada’s real estate markets, but things are improving. The CMHC sees “moderate” vulnerabilities across Canada. Toronto held its rating of “high” vulnerability, due to overvaluation and overheating. Vancouver improved, dropping from high to moderate vulnerability.
Canadian Borrowing Rates Are Officially Below Last Year’s Levels
Canadians officially now have cheaper access to debt than they did last year. The effective household borrowing rate fell to 3.75% on July 26, dropping 0.27% from just a month before. Compared to the same week last year, this is a decline of 0.79%. Rates are 24.58% higher than in 2016, so there’s more resistance than during peak credit growth. But the recent declines are the first in 2 years.
Canadian Reverse Mortgage Debt Makes A Huge Jump, Balance Tops $3.7 Billion
Reverse mortgage debt is soaring, as more seniors tap their home equity. Regulatory filings show the balance of reverse mortgage debt hit $3.72 billion in May, up 1.58% from last year. This represents a 27.63% increase compared to last year. The fast growing segment of debt is boosted as more seniors opt to stay put, instead of downsizing.
Canadian Homeownership Jumps In Older, Non-University Educated Demographics
The CMHC’s latest study shows a big jump in the rate of homeownership. In 1999, the rate of ownership stood at 60% – a very high rate by international standards. By 2016, this number jumped to 62.8%, with the largest group between the age of 55 to 64 – which reached 78.4%. StatCan notes,“almost all of this increase was because of population aging, given that families in older age groups are more likely to own their homes.”
Toronto Real Estate
Toronto Real Estate Sales Surge Higher, But Fall Short Of Typical
Toronto real estate sales made a huge jump, but still fell short of typical levels for the month. TREB reported 8,585 sales in July, up 23.47% from last year. It’s a huge jump towards typical levels for the month of July, but is still 6.09% short of the median 5-year number. Big movement back towards normal, but still not quite there yet.