Mortgage lenders take $2B haircut
June 19 2018
Canada’s mortgage lenders saw business plunge by $2 billion in the first quarter to $13.7 billion, the lowest level in nearly four years, Statistics Canada reports.
The slide in mortgage borrowing mirrored the 17 per cent decrease in the value of housing sales in the first quarter of this year. The decline parallels the introduction of tougher mortgage qualification rules, the stress-test, and higher lending rates.
On the upside, total household debt in Canada was down marginally from the fourth quarter of 2017.
Bank of Montreal economic analyst Priscilla Thiagamoorthy noted in a commentary that the debt-to-income ratio generally tends to fall in the first quarter due to seasonal factors.
"The steeper drop to start 2018 suggests we may finally be at a turning point, as the one-two punch of stricter mortgage rules and higher interest rates slow household borrowing while income continues to climb," she said.