Canada’s mortgage market grew at its fastest pace in over 10 years in the first half of 2021, according to new data released by the Canada Mortgage and Housing Corporation (CMHC).
The agency attributed the strong growth to record-low interest rates and “pandemic-fuelled demand for more space.” The findings are in line with previous reports from Equifax and Statistics Canada, which reported record levels of residential mortgage growth since the start of the year.
“In this unprecedented and unexpected economic context, mortgage credit in Canada did continue to grow,” Tania Bourassa-Ochoa, Senior Specialist, Housing Research, at CMHC said during a webinar on the report. “It not only continued to grow, but accelerated…quite rapidly.”
As of June, residential mortgage debt stood at $1.73 trillion, a 9.2% gain from the previous year. The strongest growth was seen in new mortgages, and primarily in the uninsured mortgage segment, which was up 20%.
The average loan amount also rose sharply, jumping 22% year-over-year to $358,000.
Among mortgage lenders, the biggest beneficiaries of this mortgage growth has largely been chartered banks, which hold 78% of overall mortgage debt as of 2021 and 75% of newly originated loans as of Q1 2021.
Mortgage delinquencies (non-payment for 90 days or more) continued to trend down for all lender types, reaching a 30-year low as of the first quarter. The lowest delinquency rates were recorded by credit unions at 0.13% (down from 0.15% in 2020), while the arrears rate for chartered banks fell to 0.20% (down from 0.23% in 2020).
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