credit and debt
CANADIANS’ MORTGAGE DEBT ACCUMULATION SLOWING Canada’s mortgage market continues to expand, but in a more tepid manner than in past years.
Canada’s mortgage market eased its way into 2018, with outstanding mortgage debt, net mortgage growth, and the average outstanding balance per mortgage all rising more slowing in the four quarters ending in Q2 2018 than during the previous year. Notably, total outstanding mortgage debt rose by only 2.6% between Q2 2017 and Q2 2018—markedly lower than the 5.5%-6.9% annual growth registered over the preceding three years. This reflected slower growth in the number of active mortgages—a 1.3% expansion over four quarters versus an average of 4.2% over the previous three years—as well as slower growth in average
outstanding balances (3.7% most recently versus 4.5% over the preceding three years). Part of this deleveraging activity comes down to responsible fiscal behaviour on the part of households, but it also reflects tougher lending conditions, slowing housing markets in Toronto and Vancouver, and rising interest rates, which has made borrowing more expensive. Indeed, the average scheduled mortgage payment per household rose by 4.1% between Q2 2017 and Q2 2018—almost double the 2.2% annual increase experienced over the prior three years. Look for this trend to continue through the remaining 2018 data.
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