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MNI BRIEF: Canada Mortgage Growth Is Slowest Since 2011 In May


Canadians added to their mortgage debts at the slowest pace in more than a decade in May, before the central bank added another two rate hikes to its tightening campaign that a third of people say has become a mistake.

Statistics Canada said Thursday mortgage debts increased 0.2% to CAD2.12 trillion, with the annualized pace of 2% the slowest since December 2011. While home sales rose a fourth straight time that month after the Bank of Canada signaled a pause to hiking early this year, prices were down about 10% from their peak set in February 2022. Mortgage lending growth has slowed from about 10% early last year.

The Bank of Canada unexpectedly returned to hiking in June and moved another quarter point earlier this month, with the 10th hike of the campaign bringing the highest overnight borrowing cost since 2001 at 5%. Governor Tiff Macklem told reporters that with monetary policy working more slowly than expected to curb overheated demand, even higher rates may be needed.

Some 36% of Canadians see the Bank's latest rate increase as "the wrong decision" according to a separate Angus Reid poll published Thursday, up 13 points from last September. Another 32% said the Bank should keep the rate on hold and 11% would raise rates further to curb inflation. (See: MNI INTERVIEW: FOMO Trumps BOC In Housing Market- Royal LePage)

Another report Thursday showed further strength in housing during the Bank’s rate pause, with the Teranet-National Bank housing price index up the most since 2006 in June with a 2.2% increase. The index had fallen almost 9% since April of last year.

Mortgage Loans, year-over-year percentage growth

Source: Statistics Canada

MNI Ottawa Bureau | +1 613-314-9647 |
MNI Ottawa Bureau | +1 613-314-9647 |

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