Sarah A. Colucci, York Region's Mortgage Expert. Savings Guaranteed.
  • Home
  • WHY USE SARAH FOR YOUR NEXT MORTGAGE
  • APPLY ONLINE
  • PRODUCTS
    • Free House Value Tracker Report
    • CASH-BACK MORTGAGE
    • BRIDGE FUNDS
    • REVERSE MORTGAGES
    • SELF-EMPLOYED MORTGAGES
    • FIRST-TIME HOME BUYER PRE-APPROVALS >
      • FIRST-TIME HOME BUYER TAX CREDIT
    • MORTGAGE REFINANCE >
      • Prepayment penalties
    • SPOUSAL BUYOUTS
    • INVESTMENT PROPERTIES AND RENTALS
    • BRUISED CREDIT
    • PRE-APPROVALS
    • NEWCOMERS
    • DEBT CONSOLIDATION
    • HOME EQUITY LINE OF CREDIT
    • PURCHASE PLUS IMPROVEMENT PROGRAM
    • WHY INVEST IN REAL ESTATE
    • MORTGAGE RENEWALS >
      • New Mortgage Rules and Mortgage Renewals
    • SECOND MORTGAGE LOANS
    • LESS THAN 20% PROPERTIES
    • DOWN PAYMENT
  • CONTACT ME
  • PRIME RATE CANADA
  • CLOSING COSTS
  • DOCUMENTS REQUIRED FOR MORTGAGE FINANCING
  • MORTGAGE DICTIONARY
  • MORTGAGE NEWS
  • GOVERNMENT MORTGAGE RULES
  • MORTGAGE TIPS
  • HOUSE HUNTING CHECKLIST
  • APPRAISALS
  • FIXED OR VARIABLE RATE?

Sarah Colucci's Mortgage Blog

Stay enlightened about mortgage & real estate news in Canada.
Mortgage News 2022

Classifying Home Buyers in Canada's Real Estate Market

1/31/2022

0 Comments

 
According to a report from the Bank of Canada called Housing demand in Canada: A novel approach to classifying mortgaged homebuyers the share of mortgage-financed home purchases associated with first-time homebuyers, repeat homebuyers, and investors has risen rapidly in Canada, but little was previously known about their characteristics.

It turns out that investors residing in 11 major cities in Canada buy about 4% of all the investment properties in non-urban regions, and this share is increasing over time.

Since 2015, investors' share of home purchases has risen and even more so in 2021. Repeat homebuyers have also seen their share of activity increase slightly over time.

TransUnion found that since 2014, 14% of home purchases in Winnipeg were made by investors, whereas investors made approximately 21% of all home purchases in Toronto.

It also seems that first-time homebuyers tend to be younger than other types of homebuyers. First-time homebuyers tend to have the highest loan-to-income ratios, a crucial metric the Bank of Canada uses to monitor financial vulnerability.

When looking at debt associated with the latest issued mortgage, we can see that investors are much more highly indebted than other types of homebuyers. Investors have higher total debt service ratios than non-investors, a ratio that captures payments on all debt, including prior mortgages and non-mortgage debt.

The Bank of Canada is unsure what sources investors include in their documented income because regulatory returns and underwriting practices vary across lenders. Also, investors are underreporting income when applying for a new mortgage, so the housing market's vulnerability may be overstated. This may not be a good sign when it comes to the housing market in Canada because investors in the housing market have increased their demand, which means they likely believe prices will continue to rise in value. This may actually be a source of instability for the financial system and the economy more broadly.

TransUnion did not provide personal information to the Bank of Canada. A 44% cut-off for the total debt service ratio for insured mortgages was used, while the cut-off for uninsured mortgages was left to the discretion of individual lenders.

What does this mean?

Economists have argued that Canada's biggest cities and their surrounding areas are experiencing a real estate bubble mainly because the market is being driven by investment speculation. Currently, the main issue with Canada's real estate market is limited inventory and rapidly rising property prices.

Time will soon tell whether increasing interest rates and new Government policy will flatten the housing curve.

As always, if you'd like to discuss mortgage financing options, please call or write.

Sarah A. Colucci
Senior Mortgage Agent, Lic. M14000929
Mortgage Edge, Broker 10680
Direct: (647) 773-4849
Email: sarah.colucci@coluccimortgage.com

RSS Feed

0 Comments



Leave a Reply.

    Picture

    By: Sarah Colucci

    Senior Mortgage Agent, Lic. M14000929

    Archives

    January 2023
    October 2022
    September 2022
    July 2022
    June 2022
    May 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    August 2021
    July 2021
    June 2021
    May 2021
    February 2021
    December 2020
    November 2020
    October 2020
    September 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    February 2019
    January 2019
    December 2018
    August 2018
    May 2018
    April 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017

    Categories

    All

    RSS Feed

GET IN TOUCH WITH US

Let's get started today.



Address

411 Queen St. 
Newmarket, ON
​L3Y 2G9

Sarah A. Colucci, Mortgage Agent Lic. M14000929
Sherwood Mortgage Group
Licence # 12176

Telephone

Direct: 647-773-4849
​
Email: scolucci@sherwoodmortgagegroup.com
Picture
  • Home
  • WHY USE SARAH FOR YOUR NEXT MORTGAGE
  • APPLY ONLINE
  • PRODUCTS
    • Free House Value Tracker Report
    • CASH-BACK MORTGAGE
    • BRIDGE FUNDS
    • REVERSE MORTGAGES
    • SELF-EMPLOYED MORTGAGES
    • FIRST-TIME HOME BUYER PRE-APPROVALS >
      • FIRST-TIME HOME BUYER TAX CREDIT
    • MORTGAGE REFINANCE >
      • Prepayment penalties
    • SPOUSAL BUYOUTS
    • INVESTMENT PROPERTIES AND RENTALS
    • BRUISED CREDIT
    • PRE-APPROVALS
    • NEWCOMERS
    • DEBT CONSOLIDATION
    • HOME EQUITY LINE OF CREDIT
    • PURCHASE PLUS IMPROVEMENT PROGRAM
    • WHY INVEST IN REAL ESTATE
    • MORTGAGE RENEWALS >
      • New Mortgage Rules and Mortgage Renewals
    • SECOND MORTGAGE LOANS
    • LESS THAN 20% PROPERTIES
    • DOWN PAYMENT
  • CONTACT ME
  • PRIME RATE CANADA
  • CLOSING COSTS
  • DOCUMENTS REQUIRED FOR MORTGAGE FINANCING
  • MORTGAGE DICTIONARY
  • MORTGAGE NEWS
  • GOVERNMENT MORTGAGE RULES
  • MORTGAGE TIPS
  • HOUSE HUNTING CHECKLIST
  • APPRAISALS
  • FIXED OR VARIABLE RATE?