CIBC says that it is not housing activity that is pushing mortgage debt higher but the size of the loans.
are fuelling the rise with other parts of Canada “already in the midst of a soft landing.”
The mortgage lender’s deputy chief economist Benjamin Tal, author of the report, said: "The greatest challenge facing the hot Toronto
housing markets is the continued asymmetrical price appreciation where, for the past decade, the prices of more expensive properties are rising faster than less expensive properties."
Tal highlights the risk to the housing market of those in the hot markets who wish to move up but are being priced out of the market. He also notes the widening gap between the escalating prices of detached homes compared to a relatively slow pace of gains in condo prices.
On a positive note, the report shows that the July decrease in interest rates appears not to have fuelled borrowing significantly, most people are making repayments and the level of delinquent home loans continues to fall.
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Canadian households are adding debt at an increasing pace and it’s being driven by mortgages that account for 80% of the debt.