Canadian consumers are increasingly borrowing for homes, with the total amount of debt reaching $1.73 trillion in July 2018 as compared to a year ago.
This is an increase from 6.5% at this time last year and marks one of the fastest monthly increases since 2007 when mortgage loans were rising by 7%.
The total value of mortgages was up 1.2% in June according to Statistics Canada data, which also shows that mortgage debt has increased 9.2% over the past year the biggest increase since 2008.
The figures are not yet reflective of the four-month slowing trend in home sales because it takes several months for mortgage funds to be released after a sale.
Despite the continued rise of home prices in July, according to Teranet-National Bank National Home Price Index’s latest release, increases are continuing to slow down.
The national index increased 2% for the second consecutive month. This is a sign that home prices will continue to grow at a slower rate in response to moderate sales growth.
The Ottawa-Gatineau region saw the biggest jump in population growth, with an increase of 3.7% over 2016 levels from January to December 2017. Other cities that experienced notable increases were Halifax (3%), Montreal (2.5%), and Hamilton (2%).
Overall, there was a 1% rise in Canada’s national census metropolitan area populations during this period with lower gains for Victoria at only 1%, Winnipeg at less than 2%, Toronto also under two percent and Calgary by just half a percent as well as Edmonton which stayed flat while Quebec City grew barely more than one percentage point overall since last year too.
July saw an increase in housing prices of 17.8%, the highest it has ever been, and far from providing comfort to those who are struggling to buy a house, may have to rethink their dreams entirely.
Prices to decrease?
New forecasts show that the pace of price gains is slowed, but there’s no prediction for home prices to decrease soon. Although demand for housing has been strong historically, it may not be enough to create a continued trend upward.
The Urbanisation report stated that there were gains of 10% or more in 87% of the 32 urban markets included. Almost half of these cities had values increases over 30%, including Halifax and Hamilton.
Since 2005, the benchmarked index has seen Vancouver’s prices increase by 11%. This is followed by Toronto with a 9% rise.