Last week, Equifax Canada reported that 286,000 businesses in this country missed a loan payment last quarter.
In the Greater Toronto Area, the number of mortgage lenders repossessing homes and selling them has climbed roughly 60 per cent year over year.
Ninety-day-plus mortgage delinquency rates are climbing in Greater Toronto, Greater Vancouver and Canada generally, according to data from RBC.
Scott Terrio, an insolvency expert, recently told The Globe and Mail that he is talking to homeowners who are “teachers, firefighters, cops. Two years ago, I was doing two to five meetings a day, now I’m doing 10,” said Mr. Terrio.
The debt-fueled housing boom from 2015 to 2022 is costing Canada a fortune. See Debt is Catching Up With Canadians:
It is a personal one for people who dreamed too big and extended themselves too far. They are now reckoning with the consequences of going all in on real estate during the early 2020s boom – crushed credit ratings, legal action, consumer proposals, powers of sale and bankruptcy.
We are seeing the fear of missing out giving way to the fear of losing everything. The Financial Consumer Agency of Canada’s five-year plan to improve financial literacy, which launched in 2021 and cost taxpayers millions over the years, can’t compete with the stickiest financial lessons that hard times will teach.
Canada won top prize at the International Monetary Fund last year for the most household debt as a percentage of GDP in the G7, surpassing with ease the U.S., the United Kingdom and Germany. Italian households carry about a third of the household debt to GDP that Canadians do. In laymen’s terms, Canada is the most vulnerable G7 country to an economic recession and falling housing markets.
The segment below is a worthwhile update on property and mortgage trends in the Greater Toronto Area and beyond.
Toronto home prices have returned to pre-pandemic levels, but financial stress is mounting for homeowners. This video analyzes the surge in power of sale listings, which have risen by 60% year-over-year, and explains the underlying dynamics, from interest rate hikes to rising unemployment. Lenders, particularly individual private lenders, are more frequently initiating power of sales, contributing to a growing inventory of distressed properties. The video also delves into the renewal wall, the impact on the broader market, and the potential for financial contagion. Viewers will learn how to identify these distressed listings and understand the legal process behind power of sale in Canada. With predictions showing the peak of distress occurring around late 2026 or early 2027, this comprehensive analysis offers crucial insights for both buyers and sellers navigating this challenging real estate landscape. Here is a direct video link.