MARKET UPDATE FOR THE WEEK ENDING AUGUST 28TH, 2020
As of June 30th, banks have provided help through mortgage deferrals to more than 760,000 Canadians, which represents 16% of the number of mortgages in bank portfolios. The banks were so inundated with requests when the initial announcements were made, that roughly 90% of customers seeking a mortgage deferral were approved. By total volume of mortgages deferred, Quebec, Alberta, and Ontario are leading the country. Quebec represents the largest segment, at 27% the mortgages on deferred payment plans. Alberta is second with 26% of the insured payment deferrals. Ontario comes in third with 21% – just over one in five. Pricey BC is in a distant fourth, representing 7% of the pool.
The next great test for banks will be the looming expiry of these payment deferrals expiring before October 31st and won’t be renewed, raising the risk of defaults. If people on deferrals can’t resolve payment issues before the end of the term, they may be forced to sell. Which brings up a whole other set of problems if you only had 5% equity.
There is some good news. BMO and Scotiabank reported this week that so far, at least 90% of clients at both banks whose deferrals have already expired are making normal payments again. The chief risk officer is cautiously optimistic that the rate of recovery will continue. They believe that only one to five percent of deferred mortgages may become delinquent as the grace period expires.
Even though its late August the freehold market is still going strong, with sold properties up last week 13%, compared to the week before and of those properties sold 68% sold at or above the asking price. Again, it’s a shortage of listings that is causing this frenzy. So far this month the condo market has seen a massive increase in new listings, up 11.5% from July. Sales were up moderately 5% last week from the previous week and of those condos sold 38% sold at or above the list price.
Bosley Real Estate Ltd. is a full service boutique brokerage operating in Toronto, Niagara-on-the-Lake, Port Hope and Cambridge Ontario since 1928. We have four centrally located offices and over 250 sales representatives selling and leasing homes and condominiums in all the vibrant communities we work in. Our brand is well recognized internationally thanks to our unique affiliation with Leading Real Estate Companies of the World. Our sales teams meet weekly to discuss market conditions, trending topics, and anecdotes that more accurately reflect the true temperature of the real estate market.