Slow Canadian real estate sales may be starting to weigh on the country’s largest banks. Canadian Bankers Association (CBA) numbers show an annual decline in mortgages. The annual decline of mortgages is the first for the country’s largest lenders.

Canadian Banks Hold Over 4 Million Mortgages

Canada’s largest banks are seeing the number of mortgages they hold decline for the first-time ever. They held 4,755,951 mortgages as of October, virtually a flat 0.01% decline from the month before. The decline works out to a 0.3% decline compared to the same month last year. The most recent three months of data is the first time the country’s largest banks held less than the year before.

Canadian Mortgages Held At Banks

The number of mortgages held at large Canadian banks.

Source: CBA, Better Dwelling.

Mortgage numbers are down from peak, and the recent trend of declines is getting larger. Mortgages hit peak in December 2017, and fell 0.41% from there – a drop of 19,886 mortgages. The annual pace of growth hit negative for the first-time in August 2018. The following months showed increasingly larger declines, through the latest data point in October.

Canadian Mortgages Held At Banks (Change)

The annual percent change of Canadian mortgages held at large banks, compared to one year before.

Source: CBA, Better Dwelling.

Ontario Represents A Third of Those Lost Mortgages

Ontario joins the rest of Canada in printing its first annual decline. Banks held 2,006,116 mortgages in October, down a relatively flat 0.01% from the month before. This represents a 0.12% decline compared to the same month last year. The province’s peak was also in December 2017, and was last reported -0.31% lower. This is the first annual decline in Ontario, representing a third of the national decline.

Ontario Mortgages Held At Banks (Change)

The annual percent change of Ontario mortgages held at large banks, compared to one year before.

Source: CBA, Better Dwelling.

British Columbia Returns To Annual Declines

British Columbia mortgages returned to declines, after taking a break. There were 643,437 mortgages at large banks in October, flat from the month before. There are 0.05% less mortgages compared to the same month one year. The declines are small in BC, representing less than a couple thousand mortgages. The peak was hit in December 2017, and the market is down 0.26% from there.

British Columbia Mortgages Held At Banks (Change)

The annual percent change of BC mortgages held at large banks, compared to one year before.

Source: CBA, Better Dwelling.

The industry narrative is obviously that B-20 is reducing OSFI regulated borrowers. However, the 2 provinces most impacted by the measures represent less than a third of the drop. Income to home price ratios aren’t nearly as high outside of the two provinces. This means B-20 isn’t the boogey man it’s being set out to be. More likely, future demand was pulled forward do to FOMO. Now we’re seeing levels balance out, and rising rates do its thing.

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