Despite the mounting unemployment rate, mortgage delinquencies actually dropped in most Canadian cities in the fourth quarter of 2020, according to the Canada Mortgage and Housing Corporation.
Only six markets saw year-over-year increases in the share of delinquent borrowers: Kingston (up by 5.88%), Brantford (7.14%), Victoria (9.09%), Abbotsford (10%), Kelowna (11.11%), and London (30%).
The other 26 major housing markets posted lower mortgage delinquency rates, with the most significant declines observed in Trois-Rivières (down 33.33%), Saint John (34.62%), and Kitchener (45.45%). This is despite all three markets having experienced notable home price growth recently, according to real estate information portal Better Dwelling.
By comparison, the traditional powerhouse markets fell right in the middle of this range. Vancouver’s delinquency level remained virtually flat year over year, while Toronto’s fell by 9.09%. Of the largest cities, Montreal had the greatest decline in delinquency, down 25.93% annually.
With the economy recovering at a steady pace, these trends are likely to hold for the rest of 2021. A recent Fitch Ratings analysis projected a mere 0.35% to 0.5% increase in the nation’s delinquency rate this year.
“We do not expect the level of delinquencies, distressed sales or foreclosures to increase to the levels seen in the US during the financial crisis,” Fitch said in its report, adding that more sustainable gains are likely to come afterwards.
MBN
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