A growing number of Canadians are finding it difficult to pay off their financial accountabilities, according to a report by the Office of the Superintendent of Bankruptcy late last week.
rtgage Professionals Canada has renewed calls for changes to the federal government’s stress tests, arguing they pose serious risk to the housing market and overall economy.
Data from the Office of the Superintendent of Financial Institutions indicated intensified borrowing among Canadian seniors taking advantage of their housing equity, with growth of the nation’s reverse mortgage load reaching its highest point in 8 years.
Based on a leading indicator for where home prices are headed, an economic-research firm is predicting a booming year for one of Canada’s largest housing markets.
The Canadian housing market’s performance has been even worse than TD expected, but there are multiple reasons one of Canada’s biggest banks doesn’t predict “a further sustained deterioration” — or worse — this year.
Canada’s home prices increased 4% year-over-year in the fourth quarter of 2018, a sign of the market recovering from “the most significant housing correction” since the financial crisis.
The Bank of Canada has stepped to the sidelines since it last hiked the overnight rate, which influences rates on the mortgage market, this past October.
By one measure, conditions in Canada are reminiscent of those present in the US right before a stateside housing bubble burst, yet a repeat performance to the north is unlikely.
“The problem, though, is that Canada has been undergoing a construction boom. As has been typical of historic real estate cycles around the world, new supply will reach the market just as demand is falling,”
“The number of consumers claiming insolvencies could continue to trend higher, but the good news is the upswing is nowhere near the double-digit gains seen during the depths of the financial crisis,”
The head of Canadian Imperial Bank of Commerce (CIBC) said that the country’s mortgage industry will plateau in the near-term, with growth limited to the low single-digits.
“For now, as we expect the Bank’s forecasts to be… more upbeat than our own, we would not be surprised if the Bank of Canada continues to argue that it needs to raise interest rates,” reads a Capital Economics Bank of Canada Watch
A significant proportion of Canadians are beginning the year with tempered expectations for the housing market and the national economy, according to the latest findings of the weekly telephone polling conducted by Bloomberg Nanos Canadian Confidence Index.
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