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B.C. residents paying more for mortgages while taking out fewer of them

Canada Mortgage and Housing Corporation, Equifax Canada reports find B.C. residents struggling
British Columbians took out the least new mortgages in 2023, according to the Canada Mortgage and Housing Corporation’s latest survey of mortgage holders. (THE CANADIAN PRESS/Sean Kilpatrick)

British Columbians took out the fewest number of new mortgages in 2023 relative to other Canadians, according to a new report.

Canada Mortgage and Housing Corporation’s annual mortgage survey found that 15 per cent of surveyed Canadians took out a mortgage in the past 18 months. But the corresponding number for B.C. was 13 per cent, the lowest in the country.

The report also highlights the effect of high interest rates, which are expected to drop this year. Just over 80 per cent of mortgage holders — up from 75 per cent in 2023 - said they felt the pinch of higher interest rates, which peaked May 2023 and Jan. 2024.

Not surprisingly, more people held off buying homes. Half of respondents worried about the risk of default on their mortgage. Many consumers have taken steps to cut their expenses, create a budget or increase their income, the report notes. This said, just 14 per cent of respondents said they found it hard to cover their mortgage payments.

This, however, does not mean that Canadians, especially British Columbians, are not experiencing financial strain.

A March 2024 report from Equifax Canada Report found what it called “soaring” mortgage delinquency rates in Ontario and British Columbia during the fourth quarter of 2023 compared to the year prior, with the proviso that the absolute number of delinquencies is very low. During the fourth quarter of 2023, 0.13 of mortgages in B.C. were delinquent, according to CMHC.

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On average, B.C. residents who renewed their mortgages are paying $680 more a month in the fourth quarter 2023 than they were in the fourth quarter 2022, according to Equifax Canada.

The report also warns of tougher times ahead.

“As we assess the unfolding dynamics in the housing market, it’s evident that upcoming mortgage renewals will be pivotal for many homeowners,” Rebecca Oakes, vice-president of Advanced Analytics at Equifax Canada, said. “With the prospect of renewing mortgages at substantially higher rates than current ones, consumers who locked in historically low interest rates in 2020 — particularly those with substantial loan amounts — may face challenges in sustaining their payments.”

With more money going toward mortgage payments, British Columbians have less money to pay other bills. This has led to more British Columbians missing payments for non-mortgage bills, especially credit card bills.

“Factors such as high cost of living, inflation, credit card payments, and mortgage renewal worries are coming at consumers right now,” Oakes said. “Budgets have been pushed to the limit for some. There’s no doubt Canadians are feeling the financial pinch right now.”

Wolf Depner

About the Author: Wolf Depner

I joined the national team with Black Press Media in 2023 from the Peninsula News Review, where I had reported on Vancouver Island's Saanich Peninsula since 2019.
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