Vancouver has the highest home prices in the country, but home owners are still managing to make their mortgage payments, according to a new Canada Mortgage and Housing Corporation (CMHC) report, Mortgage and Consumer Credit Trends: British Columbia CMA’s − Q1 2018.
Here are four facts we discovered in this report:
1. Mortgage payment amounts have soared
The average monthly mortgage payment spiked 6.5 per cent in Q1 2018 compared to Q1 2017.
The reasons? Rising home prices, larger mortgages, and rising mortgage rates.
2. Fewer home owners default on mortgages
In contrast to rising prices, the share of delinquent mortgages in Metro Vancouver and Victoria is falling.
The decrease is attributed to:
- a strengthening job market. In Vancouver the unemployment rate is 4.7 per cent. Working home owners are unlikely to miss mortgage payments.
- rising home values. Condominiums have risen 87 per cent since 2013 in the Board area, substantially raising home owners’ equity; and
- a high level of liquidity in the housing market.
3. Delinquency rates are down
In the first quarter of 2018, delinquency rates for loans dropped to less than one per cent compared to the same period in 2017, and were much lower for mortgage holders than for those without a mortgage.
Qualifying for a mortgage is increasingly difficult because of new mortgage rules, including a mortgage stress test. Home buyers who are successful typically have higher incomes, stable employment and more assets, reducing the likelihood they’ll be unable to pay their mortgage.
4. Fewer home owners have mortgages
In Metro Vancouver, the share of home owners with a mortgage declined by one per cent in Q1 2018 compared to Q1 2017.