Mortgage Deferral Program Wind-down Has Much Less Impact Than Anticipated, Home Ownership Aspirations Continue to Rise Through COVID-19: Mortgage Professionals Canada Report

TORONTO, Dec. 16, 2020 /CNW/ - Today, Mortgage Professionals Canada (MPC) released its fourth in a series of housing market reports how COVID-19 is affecting consumer sentiments towards housing and mortgages. The data suggests that consumers' attitudes on homeownership during the pandemic have changed very little since MPC first polled Canadians early in the summer.

The fourth installment of the Rapidly Evolving Expectations in the Housing Industry survey was written by MPC's Chief Economist Will Dunning. This report surveyed almost 1,000 Canadians, comprising a wide sample of home owners with mortgages, renters and others, including people who live with their parents. The survey occurred during November 16 to 26.

As an alternative to forecasting, these reports, Dunning explained, "are creating some new data on shifting attitudes and expectations about the housing market, to help us interpret evolving market conditions, and possibly provide clues about future changes." As Canada experiences one of its history's most tumultuous and destabilizing times, and as the unfortunate "second wave" of COVID-19 took hold through this report period, "I am most struck by the huge rise in aspirations about home ownership, although we don't know how many of these aspiring homeowners will be able to accomplish their new goals" said Dunning. Additionally, Dunning noted, "the strength of sales data so far implies that 'all of this' has caused a lot of us to give a lot of thought to how we live our lives, and in what arrangements."

"As we close 2020, this fourth edition of our surveys reveals a huge increase in the desire for a place to own," said Paul Taylor, President and CEO of MPC. "We also see a subtle shift in Canadian's purchasing consideration weighting, with the focus being even less about the investment and more about a place to live and home to own. The data demonstrates and reveals healthy, and unsurprising, owner-occupier aspirations in a lockdown climate." Taylor also noted that the clear messaging from the Bank of Canada has also helped those aspirations. Governor Tiff Macklem told Canadians in August "that interest rates are very low and they're going to be there for a long time," and Taylor explained this announcement by the Bank "altered the calculations for buyers."

Dunning did note that, "in these extremely abnormal times, we should not expect that the recent data is sending us any reliable messages about what will happen next year." He also discussed rental housing. The report notes that "data from multiple unofficial sources is now indicating that there has been a sharp rise in availability of rentals, and sharp reductions in asking rents for available dwellings," but lamented the fact that official data on Canada's rental markets only comes annually from CMHC. Dunning asked the CMHC "to increase the frequency of its rental market survey, from annual to quarterly, and to accelerate the release of the data."

Taylor commented on the uncertainty regarding the future impact of the ending of mortgage deferrals. "We are facing an economic risk, as has been reported by numerous economists and crown agencies, that at the end of mortgage deferrals there could be large numbers of Canadians unable to meet their mortgage obligations, forcing them to sell their homes. This may result in a rapid increase of homes available for sale, which causes prices to fall, which in turn impairs the economy. Fortunately, the number of Canadians expected to need continuing support following the expiry of the deferrals appears to be significantly lower than originally anticipated, which our survey respondents reinforce."

The full report can be read here and the infographic here.

About Mortgage Professionals Canada

Mortgage Professionals Canada (MPC) is the national mortgage industry association representing over 12,000 individuals and 1,000 companies, including mortgage brokerages, lenders, insurers and industry service providers. Our members make up the largest and most respected network of mortgage professionals in Canada. MPC represents members' interests to government, regulators, media and consumers. With our members, the association is dedicated to maintaining a high standard of industry ethics, consumer protection and best practices.

The mortgage broker channel originates over 35% of all mortgages in Canada and 55% of mortgages for first-time homebuyers, representing approximately $80 billion dollars in economic activity annually. With our diverse and strong membership, Mortgage Professionals Canada is uniquely positioned to speak to issues impacting all aspects of the mortgage origination process.

SOURCE Mortgage Professionals Canada

Christian von Donat, C: 613-408-0498, [e-mail]