B.C. has enjoyed near-record-low mortgage delinquency over the past four quarters, according to the latest Mortgage and Consumer Credit Trends report by the Canada Mortgage and Housing Corporation.
The analysis, which covered Q3 2018, indicated that only 0.1% of outstanding mortgages in Vancouver were delinquent in that quarter, falling from the 0.11% observed during the third quarter of 2017.
Victoria also posted good results, with delinquent mortgages accounting for only 0.12% of outstanding mortgages in Q3 2018, down from 0.13% the year prior.
These rates were markedly lower than the provincial average of a still-miniscule 0.16%, attesting to B.C. households’ steady financial footing over the past several years.
“Prior to this stability, declines in delinquency rates since 2014 can be broadly attributed to a number of factors including strong employment gains, rising home values regardless of market segment, low interest rates and strong population growth fueling stronger sales in the housing market,” the CMHC explained.
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Lower delinquencies were especially apparent in mortgages with higher limits at origination ($400,000 and greater), settling at 0.1% as of Q3 2018. This bracket accounted for approximately 65% of all outstanding mortgages in Vancouver. Furthermore, 63% of these were mortgages with limits greater than $600,000.
Conversely, delinquencies involving mortgages with smaller limits at origination (up to $200,000) were noticeably higher in both Vancouver and Victoria.
“This suggests that smaller sized mortgages are generally held by borrowers with lower incomes and/or less stable employment than borrowers holding larger mortgages.”