Mortgage growth continues to hover around lowest levels in decades

Despite June being the third consecutive month of growth rate increases, situation remains highly problematic

Mortgage growth continues to hover around lowest levels in decades

Despite the annual rate of Canadian mortgage growth seeing noticeable improvement, the year-over-year trend remains among the slowest since at least 2001.

Numbers from the Bank of Canada indicated that the outstanding balance of mortgage debt was 3.7% higher year-over-year in June, up to $1.57 trillion total.

“The record came with an uptick in the rate of growth, which had bottomed in recent months,” Better Dwelling explained in its analysis of the figures.

However, the analysis quickly added that while the June movement was the third straight month of growth rate increases, it remains a problematic situation.

“Mortgage credit growth is improving, but still growing at one of the lowest rates seen in decades.”

Last month saw the largest annual increase since August, and at the same time the poorest June since 2001. It was also the second weakest growth rate since 1990.

“Things picked up over the past few months, but not enough to matter.”

Statistics Canada figures for the final quarter of 2018 showed that non-bank lenders contributed significantly to this recent growth.

This segment accounted for one-fifth of the nation’s institutionally held residential mortgages outstanding, representing over 1.7 million accounts for a total value of $325.5 billion. Uninsured mortgages outstanding contributed $188 billion (57.8% of the value), spread over 1.1 million mortgages (65% of the accounts).

During the same quarter, non-bank lenders extended 152,554 mortgages, approximately 9% of the total held in that period. Together, these were valued at $39.3 billion, which was 12.1% of the total volume for that quarter.