Industry body says most owners are well-placed for decline
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Investors in residential real estate should be prepared for a slower pace of activity in 2018 but most owners are well-placed to withstand decline.
That’s the view of Mortgage Professionals Canada (MPC), the industry body representing mortgage brokers and lenders, which says that rising interest rates and policy changes are already having an effect.
Tighter lending regulations come into force at the start of January and is likely to exacerbate the moderation of the housing market.
However, most Canadians believe that residential real estate is still a good long-term investment and have told MPC that they are happy with their homebuying decisions.
Most owners have sufficient equity in their homes to withstand any decline in the housing market in the year ahead.
Banks should be OK
Banks should not see a significant rise in delinquencies due to a slower housing market.
The MPC report reveals that Canadian homeowners are motivated to pay down their mortgages faster with a third shortening amortization periods each year. Mortgage arrears are just 0.24%.
However, the mortgage market has declined from 7.3% annual growth over the past 12 years to 5.9% this year and a projected 5.5% in 2018.
The tightened B-20 underwriting rules will preclude up to 7.5% of all buyers from obtaining a mortgage as a result of the stress tests.
That’s the view of Mortgage Professionals Canada (MPC), the industry body representing mortgage brokers and lenders, which says that rising interest rates and policy changes are already having an effect.
Tighter lending regulations come into force at the start of January and is likely to exacerbate the moderation of the housing market.
However, most Canadians believe that residential real estate is still a good long-term investment and have told MPC that they are happy with their homebuying decisions.
Most owners have sufficient equity in their homes to withstand any decline in the housing market in the year ahead.
Banks should be OK
Banks should not see a significant rise in delinquencies due to a slower housing market.
The MPC report reveals that Canadian homeowners are motivated to pay down their mortgages faster with a third shortening amortization periods each year. Mortgage arrears are just 0.24%.
However, the mortgage market has declined from 7.3% annual growth over the past 12 years to 5.9% this year and a projected 5.5% in 2018.
The tightened B-20 underwriting rules will preclude up to 7.5% of all buyers from obtaining a mortgage as a result of the stress tests.
