As we do each month, we’ve rounded up some of the latest real estate and mortgage-related news from the past few weeks:
Vancouver’s Housing Market Earns Dubious Honour
Vancouver home prices may be falling now, but their record-high levels throughout 2018 have earned Vancouver the distinction of being ranked the world’s second-least affordable city.
The ranking was published as part of Demographia.com’s annual housing affordability survey, which measured prices in 309 metro markets in eight countries.
Vancouver was beat out only by Hong Kong, where median property prices are 20.9 times the median household income. Vancouver’s multiple of 12.6 was enough to earn it second place, knocking out Sydney, Australia.
The other Canadian city to make the top 10 list was Toronto, where median home prices at 8.3 times median household income.
FCAC Report Highlights HELOC Concerns
The Financial Consumer Agency of Canada (FCAC) released a report last week critical of how Home Equity Lines of Credit (HELOCs) are being used across the country.
Among its key findings:
- 27% of homeowners with HELOCs are making interest-only payment most or all of the time
- 41% for those aged 25-34
- Many HELOC-holders are using them to overspend
- One in four would “struggle” to make payments if their payment amount rose by less than $100 a month
- 30% of HELOC-holders use their HELOC to pay credit cards, mortgages or other loans
- 36% for those aged 25-34
“HELOCS can be risky products for some consumers,” says the FCAC report. “To mitigate these risks, financial institutions should take into account the financial needs and circumstances of consumers, disclose all relevant risks, and work with customers to ensure they understand product characteristics and have credible repayment plans.”
While the report notes that borrowers would benefit from greater upfront information about HELOCs, it adds that they should also be proactive in familiarizing themselves with the product prior to applying.