Price resistance rising in suburban Vancouver

December 9, 2021



Surrey, B.C. house listed at $2 million Dec. 4, 2021. | Coldwell Bankers

An annual survey of Canadian real estate lenders indicates that the humble single-family house trumps office towers, industrial warehouses and any other type of property. It provides lenders the least risk and borrowers the most generous financing.
Canadian lenders are generally feeling more optimistic about the real estate sector than at any point in the past two years, according to the 2021 Canadian Real Estate Lenders’ Report from real estate firm CBRE, released November 25.
Two-thirds of lenders intend to increase real estate lending in their portfolio allocations in 2022 while the remainder aim to maintain current allocation levels.
Toronto, Vancouver and Montreal were the top three most desirable destinations for lending capital in Canada.
The top two real estate sectors lenders wish to target are single-family housing and apartment buildings. Grocery-anchored retail was listed as the third-most popular property, with the least concern and most available financing.
While all markets are seeing increased lender appetite for real estate, Toronto, Vancouver, Montreal and Ottawa continue to get the most attention with  83 per cent or more interested in transactions. In spite of the headwinds facing Alberta, real estate lenders continue to be active in both Calgary and Edmonton with about 80 per cent willing to transact in the region.
Key reasons for the lending attraction for residential real estate are based on substantial returns on asset equity and the minuscule default rate on residential mortgages.
Canada Mortgage and Housing Corp. notes that, as of June 2021, just before tighter federal lending rules came into effect, the default rate on home loans had fallen to 0.36 per cent—the lowest level in 11 years—and down from 0.42 per cent a year earlier.