Non-bank lending posts strong first-half performance – StatCan

This is despite home sales slowing down during the second quarter

Non-bank lending posts strong first-half performance – StatCan

Non-bank lenders saw a substantial increase in the value of residential mortgages extended during the first half of 2021, according to Statistics Canada.

In the second quarter alone, mortgages provided by non-bank lenders totalled $72.1 billion, 50.5% higher on an annual basis. The value of mortgages outstanding held by non-bank mortgage lenders as of the end of Q2 amounted to $346.6 billion, up by 4.7% year over year.

This is despite data from Canadian Real Estate Association indicating that home sales decreased in the April-June period this year, StatCan said.

“This may be because of the lag between the sale of a home and the transfer of the corresponding mortgage funds,” StatCan said.

From Q1 to Q2, the number of mortgages extended increased by 90,266 (up 47.1%), while the number of outstanding mortgages rose by 6,720 (up 0.4%). Quarterly increases were also observed in the value of mortgages extended (up 39.0%) and outstanding mortgages (up 2.3%).

“Quarterly fluctuations in mortgages extended are in part attributable to seasonal variations in mortgage activity,” StatCan said.

Read more: StatCan on non-bank lenders’ mortgage arrears rate

The share of uninsured mortgages extended by non-bank lenders also posted continuous growth, with their value increasing by 69.3% annually in Q2, versus the 0.25% uptick in insured mortgages. Outstanding mortgages held by non-bank lenders exhibited similar trends, with the value of uninsured mortgages up by 10.6% year over year and the value of insured mortgages down by 3.9%.

“Mortgages outstanding held by chartered banks displayed similar movements over the past 12 months: the value of uninsured mortgages outstanding increased 19.6%, while that of insured mortgages decreased 2.1% from the second quarter of 2020 to the same quarter in 2021,” StatCan said.