Daily Market Update

Economists suggest level of housing starts is unsustainable… Banks see decline in insured mortgages… Lying on loan applications is OK!… Condo King says foreign ownership is 50 per cent of the market…

 

“Unsustainable” - Economists react to housing starts data

Economists have given their opinion on the level of housing starts following the latest stats from CMHC. The figures showed continued increase in the level of building, especially in the urban areas of Ontario and Atlantic Canada. Economists from the TD Bank say that builders are working on the basis of high resales and low interest rates but Jonathan Bendiner of TD says that this is unsustainable with interest rates set to gradually increase and overbuilding already at a moderate level. Other economists say that although there is still high demand for certain property types in certain demographics, that won’t last forever and the situation needs to be monitored. Read the full story.

 

Big banks see slowdown in insured mortgages

The level of insured mortgages held by Canada’s largest banks is seeing almost zero growth. This is the finding of research by Macquarie Capital Markets analyst Asim Imran who has searched data from the Office of the Superintendent of Financial Institutions. He found that there has been growth in uninsured home loans; 12 per cent for the big six banks for the year to May. The decline in insured mortgages, Mr Imran says, is due to it being more difficult for banks to buy bulk insurance for their portfolios, banks are more cautious over lending, and buyers are saving larger down payments which mean insurance is not mandatory. Read the full story.

 

Lying on mortgage applications is OK!

A staggering 10 per cent of Canadians think it is ok to inflate their income on mortgage applications. This is according to a survey by credit agency Equifax who found that 9 per cent have actually done it! While they may believe that they will get away with it, their fraudulent activity will usually be exposed. As applicants have to provide T4 tax slips it would be hard to get through the checks and balances in place to secure a mortgage but that clearly doesn’t stop some people trying. Another issue raised by the survey is how concerned people are about their personal data. With so much information required for mortgage applications, 79 per cent are worried about identity theft and 81 per cent say lenders are others in the mortgage business should do more to protect personal data. Read the full story.

 

Developer claims that half of Toronto’s condos have foreign owners

He’s known as Toronto’s ‘Condo King’ but Brad Lamb believes that foreign ownership of the city’s condos is around 50 per cent of the total market. While CMHC figures released last week showed that only 17 per cent of those surveyed are investors there was no indication of the level of foreign investors as they only included those who live in the same area as their investment. Mr Lamb isn’t suggesting that foreign investors are buying up condos and leaving them empty; something that has been reported in London. He says that investors are putting their properties on the rental market. He also predicts that most Torontonians will be living in condos in the next 20 years and that the increase in building larger condo units for families is a good move. Read the full story.

 

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