One province in Canada’s late mortgages are at pre-1990 crash levels


Toronto’s booming real estate sector took Ontario late mortgage
payments to a new low. Canadian Bankers
 (CBA) stats show that late
payments are at 1990 levels. If you’re unaware, the last low was
just before a real estate crash that took 13 years for prices to
recover in Toronto.

Mortgages In Arrears Drops 18.4%

The number of mortgages in arrears fell for another month in
April. Mortgages in arrears, which are those with late payments
in excess of 90 days, have dropped across the province. April saw
2,229 of the 1,988,089 mortgages fall into arrears, an 18.4%
decrease from the same month last year. Note the CBA only has
data for ten of the largest banks in the country. So alt-lenders,
and private mortgages would not be included in this number.


Same Level As January 1990, Right Before They Started Soaring

The number of mortgages in arrears matches the lowest number in
the province’s 27 years of data. It represents 0.11% of all
mortgages, which is the level last attained in January 1990. This
was right before the last provincial real estate crash. The
average over the past 27 years is 0.36%, so this is a really good
number…possibly a little too good.

Either Wages Are Growing Faster Than Prices, Or It’s A Bubble

This could mean a few things, but most likely it means the
economy is in hyperdrive or the market is in a major real estate
bubble. If the economy is in hyperdrive, wages are growing at
such a a rate that prices are being easily absorbed. There’s some
evidence that wages in and around Toronto are
higher than most people think
. Whether they grew enough to
absorb the massive increase in prices in places likeToronto and Guelph, we won’t know for a couple
of years. That’s when Statistics Canada will give us a thorough
update on 2017’s wages. Although, early indicators…

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