26 January 2011

“The decreasing demand for mortgage loans will seriously affect first time home buyers. The deal is that new mortgage rules will mainly reduce the amount of marginal borrowing. We expect 2%-3% decline in mortgage originations in 2011. The reason for that is the reducing of maximum amortization period. In addition to it, we may see mortgage outstanding rising by 5% (in 2010 it was 7.7%)”.
Here are also other important facts from CIBC’s Household Credit Analysis Report:        
•    It turned out that the lines of credit are rising by a monthly pace of 0.3%. It’s the slowest pace since 2007 (in 2009 it was about 2%).
•    The same thing is with the direct loans: the delinquency rate has been decreasing and now it’s only 1.23%.
•    During the past year the credit card delinquency rates and bad debt have increased significantly, but recent numbers show a far more optimistic tendency. It’s obvious that this sphere depends greatly on the labour market changes. Given the unemployment level is rather stable, the delinquencies in this portfolio will probably improve.