Annual State of the Residential Mortgage Market in Canada – CAAMP (Part 1)

The Canadian Association of Accredited Mortgage Professionals (CAAMP) in its most recent annual report of the Residential Mortgage market in Canada (Nov 2011) provided an interesting outlook on three different topics:

  1. Consumer opinions on several issues related to housing and mortgages
  2. Consumer choices in the mortgage market and satisfaction level
  3. Outlook for the housing and Mortgage markets

The synopsis of this report will be presented in a series of three articles. This first part will start with a summary of the consumer responses to topical question related to housing and mortgages (topic No.1).

The data used for this report was obtained through an online survey to 2,000 Canadians, including home owners who have mortgages, renters, home owners without debt on their properties, and others that are not responsible for mortgage payments or rents. The consumers were asked to what extent they agree or disagree with various statements, on a 10-point scale; a response of 10 meaning they agree completely and 1 meaning total disagreement.

Most important findings were:

  • The statement that found the highest degree of agreement is that “as a whole, Canadians have too much debt”. This, coincidentally or not, has been asserted repeatedly by senior government officials and other voices in the news media.
  • There is also a high degree of agreement that “low interest rates have meant that a lot of Canadians became homeowners over the past few years who should probably not be homeowners”.
  • There is a widespread opinion that “real state in Canada is a good long-term investment” and that “mortgage debt is good debt”.
  • Very few agreed on the statement “I regret taking on the size of mortgage I did” and most believe that they have been responsible on the amount of debt they have assumed. It seems that prudence rules the land.
  • Data on mortgage arrears indicates that there are very few Canadians who are not meeting their mortgage obligations and estimates developed in the report indicate that a vast majority of Canadian mortgage borrowers are well positioned to deal with potential increases of mortgage rates. Moreover, they are acting aggressively to pay off their mortgages, considerably more rapidly than they are required to.
  • Other topics asked that reported more neutral opinions were:
    • Canada’s housing market is in a “bubble”
    • I am concerned about a downturn in Canada’s housing market in the next year
    • Canada’s superior banking system will shelter us from significant downturns like the one experienced in the US
    • House prices in my community are at reasonable level
    • I am optimistic about the economy in the coming 12 months
    • I am delaying my retirement until my mortgage is paid off

The next article of this series will cover the findings of the survey in relation to what consumers think about the choices available in the mortgage market and their levels of satisfaction.

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