Vancouver housing market at risk of mortgage default.

March 12, 2015 Facebook Twitter LinkedIn Google+ Finances,Mortgages

mortgage default

Consistently raising housing prices in greater Vancouver area can get us to a housing market crash leading to mass mortgage default which result could be devastating. When the U.S. noticed similar price run-up, what followed was enormous housing market crash of which effect we can still observe. Canadian housing market described as “overvalued.” House prices have risen more than 60 per cent nationwide since 2000, with “Vancouver ranking second in terms of the lowest affordability globally after Hong Kong.” As of the second quarter of 2014, mortgages are accounted for 47 per cent of total consumer debt.

“There could be an economic earthquake,” says Helmut Pastrick the chief economist for Central 1 Credit Union.

“No doubt there will be another economic recession. There will be a time when housing prices decline. That’s almost certain. This current phase we’re in will not last indefinitely.”

Economists draw a distinction between Canada’s attempts to regulate mortgages and the dubious lending practices which led to the 2008 U.S. economic crisis.

Household debt levels have increased to historical highs over the past decade, at more than 150 per cent of disposable income.

Report says the ability of a borrower to service a loan is a crucial factor in assessing the risk of default, but says lenders may also consider house price volatility and even factors such immigration, labour and housing.

Read full Research Report on Residential Mortgage Report Probability



Join our website free today!


© Copyright 2017 - Mortgage Brokers Victoria, BC Site by VicWeb