Time for your weekly cheat sheet on this week’s most important stories.
Canadian Real Estate
Canada’s National Housing Agency Thinks Toronto Is No Longer Overvalued
Canada’s national housing agency thinks Toronto real estate is now more risky than most places. The CMHC downgraded Toronto risk to “moderate,” from the high rating it held prior. The rating is now at the same level the agency has for the whole country. Virtually all of the negative indicators are concentrated west of Ottawa. From Ottawa, and East – no major city is elevated above low risk, in their opinion.
Canadian Households Are Piling Into Mortgage Debt, Even As Consumer Debt Slows
Canadian households printed a new record for debt, but consumer borrowing is slowing. The balance of household debt reached $2.24 trillion in September, an increase of 3.8% from last year. The vast majority is mortgage debt, which is seeing growth accelerate. Meanwhile, consumer credit is seeing growth decelerate rapidly. The divergence is unusual, since cheap credit usually helps all segments of debt grow.
New Mortgage Lending In Canada Sees Dollar Growth Boom
Canada’s mortgage lenders are seeing a boom in growth. Lenders advanced $42.98 billion of funds in August, up 23.52% compared to last year. The 12-month average reached $31.30 billion in August, up 2.24% from a year before. On the month, August saw substantial growth. The small growth on the 12-month average may indicate a lot of it is delayed demand. There’s finally growth appearing, but so far it’s not nearly as large as the single-month view shows.
Canadian Households See Interest Rates Drop, But The Trend Is Still Higher
Household borrowing interest rates are falling, but the trend is still higher. The effective interest rate reached 3.7% on November 1, down 6.09% from last year. The effective rate fell over the past year, but last year was still 14.53% higher from a year before. Overall, they’re still up 9.79% over the past 5 years. Before 2018, we would have to go back to 2011 to find rates this high.
Toronto Real Estate
Toronto Real Estate Prices Made The 2nd Largest Monthly October Jump In Over 10 Years
The Toronto real estate market made one of the largest increases for the month. TREB reported the benchmark price of a typical home of $810,900 in October, up 5.8% from last year. The City of Toronto reached $897,200, up 6.1% from last year. The benchmark increased $5,400 from the month before, the second largest October rise in over 10 years.
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