Rising home prices push average Ottawa mortgage debt up to $187K

Mortgage

Ottawa residents are carrying increasingly large mortgages as the city’s home prices rise, but so far don’t appear to be having problems servicing their growing debts, a new report says.

TransUnion Canada said Tuesday that the average consumer mortgage debt in Ottawa stood at $186,735, a year-over-year increase of 7.29 per cent.

The credit reporting agency said rising housing prices were the primary factor. According to the Ottawa Real Estate Board, the average resale price last month was $420,335, up from $398,608 in July 2016.

Despite the growing size of a typical mortgage, fewer Ottawa residents are finding themselves in arrears. TransUnion said the delinquency rate for consumer mortgages in Ottawa stood at 0.31 per cent, down from 0.42 per cent.

Nationally, TransUnion Canada says the average amount owing on mortgages was up nearly five per cent in the second quarter, even though a change in Ontario regulations last spring appears to have reduced the volume of home sales.

The credit monitoring agency says the average mortgage balance in this year's second quarter was $198,781, up 4.8 per cent from that period last year.

TransUnion says the increased mortgage balance has been driven by rising home prices.

The average new-mortgage balance in the first quarter of 2017 – the most recent reported data – was up eight per cent from the same time last year at $280,093, despite a 10 per cent decline in mortgage originations, or new home loans.

Since Ontario introduced more than a dozen measures to improve home affordability, sales reported by the Toronto Real Estate Board showed big year-over-year declines in May, June and July.

Given the size of the Toronto market, the slowdown has had an impact on Canadian averages for both sales and prices.

TransUnion research director Matt Fabian says consumers have so far been able to manage their debt obligations despite the increasing balance levels.

Delinquency rates for mortgages dropped by 0.6 per cent in the second quarter, continuing a trend that began in the fourth quarter of 2016, while the delinquency rates for non-mortgage consumer debt dropped slightly to 2.7 per cent.

– With reporting by the Canadian Press