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Canada’s Residential Mortgage Market

Dara Fahy A.M.P.
Mortgage Planner

December 1, 2010

The sixth annual survey report on the State of the Residential Mortgage Market in Canada was prepared for CAAMP, the Canadian Association of Accredited Mortgage Professionals (of which I am a member) by Will Dunning, their Chief Economist.

Dated November 2010, it provides an overview of the residential mortgage market based on information obtained from an extensive cross-country survey of 1,174 home owners with mortgages and 831 tenants and home owners without mortgages. (Total 2,005).

Included are details on:

• Expectations about the housing market
• Responses to mortgage and real estate questions
• Mortgage choices and satisfaction levels
• Mortgage market parameters
• Mortgage forecast

While the report is produced for the mortgage industry, it includes a lot of useful information that may be of interest to mortgage holders and prospective mortgage holders; those who wish to purchase investment properties, or who use mortgage planning as part of an overall tax strategy.

I will address the report by breaking it down into manageable bite-sizes, and omitting the many graphs and charts. As such, this is a synopsis of a detailed 43-page report, which can be found at www.caamp.org.

Of interest are the items flagged (***) which, I believe underline the very great differences between the mortgage industry (and home ownership) in Canada compared with the United States.

A Good Time to Buy?

In general, responses to this question remain positive overall with the average score remaining above the levels seen prior to the recession.

During the past year, the greatest deteriorations have been in Saskatchewan and British Columbia, with the highest ratings in Ontario, followed by the Atlantic region and Alberta.

Home Buying Intentions

While the overall answer to the question: “How likely are you to buy a home during the next year?” has remained positive, the answers given by those in the “definitely will buy, or probably will buy” category has dropped across the board with British Columbia being the worst. This suggests that the recent slowdown in home buying activity may well persist.

Expectations about Housing Prices

Expectations about housing prices have weakened, with average expectations for moderate increases in values only.

Expectations for increases are highest in Quebec, average in most other provinces, and lowest in Alberta.

In general, current expectations overall are similar to those reported prior to the start of the recession.

Key Points Outlined

  • As a whole, Canadians have too much debt.
  • Low interest rates have meant that a lot of Canadians became homeowners over the past few years who should probably not be homeowners.
  • Real estate in Canada is a good long-term investment.
  • Few agreed that they regret taking on the size of mortgage they have.
  • Data on mortgage arrears indicates that very few Canadians are failing to meet their mortgage obligations. ***
  • Estimates in the report indicate that a vast majority of Canadian mortgage holders are well positioned to deal with potential increases in mortgage rates. ***
  • In general people stated that the recent economic slowdown has not impacted their real estate plans.
  • But, since each year only a minority of Canadians will buy or sell a home, and 12% said that the slowdown has impacted their plans, it is prudent to expect that there will be some level of continued negative consequences for the market.


Copyright Dara Fahy. All rights reserved.