Residential Market Commentary - Week of June 5, 2017

2017-06-09 | 15:24:46

Jun 5, 2017
First National Financial LP

Government intervention in the housing market seems to be having the desired effect on mortgages but supply, demand and prices do not appear to be paying attention.

New numbers suggest mortgage growth is slowing.  The most glaring figures come from Canada Mortgage and Housing Corporation.  In Q1 CMHC insured a little more than 48,000 new mortgages, a 41% drop compared to Q4 of 2016.  The value of those loans plunged 42% over the same period.  The agency now backs about $502 billion in mortgages, well below its $600 billion dollar ceiling.  CMHC says the federal government’s stricter mortgage rules are responsible for the decline. 

About half of the country’s big banks are also experiencing a slow-down in mortgage business.  The declines are not major but they are being registered during Q2, which includes the busy spring buying season.  Three of the Big-6 report declines in mortgage balances of between 0.1% and 0.4%, with home loan growth at the slowest rates in 2 years.

First National Financial LP Q1 figures show an 8% increase in single family renewals, led by growth in Toronto.

Still supply, demand and prices remain unpredictable.  May figures from Vancouver put the price of a detached home at a new record after a brief pull back – topping $1.83 million, a 5% increase from a year ago.  Condos and townhouses have also set new records.

April figures from Toronto show new listings shot up nearly 34% from a year earlier, but sales slipped 3.2%.  None the less the average price for homes of all types jumped 24.5% y/y to more than $920,000.

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