Borrowers with more than one home loan account for 20 per cent of Canada’s mortgage market
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The number of Canadians with four mortgages or more outpaced the number of first-time borrowers over the last 12 months, a recent report by realty firm Re/Max reveals.
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Published at the end of November on the real estate firm’s website blog, the post points to recent Equifax data showing borrowers with four or more mortgages grew by 7.7 per cent, year over year, doubling the growth of first-time borrowers.
Overall, borrowers with more than one home loan account for 20 per cent of Canada’s mortgage market.
Driving growth has been rapid appreciation in home prices, which has allowed homeowners to leverage existing equity to borrow more to purchase one or more additional properties.
The Equifax figures also show Canadians now hold collectively more mortgages, which are also larger, than ever before. The average new home loan, for example, was $355,000 in the second quarter of this year (April to the end of June), a 20 per cent increase year over year.
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All told the average price of a home jumped 14 per cent, year over year, in October to about $686,000, skewed by high demand in Vancouver and Toronto. Rapid price growth has also prompted Swiss bank UBS to declare Canada’s real estate market is in a bubble, with Toronto being the second-largest housing market bubble in the world, the blog post states.
The federal government is expected to implement new regulation to dampen demand, including eliminating blind bids and expanding the tax on vacant homes. As well, the Bank of Canada is expected to hike the overnight rate this spring, further reducing demand, the Re/Max report adds.
