Introducing COMPASSpoint | the annual FCT EXPERT/ease review for mortgage brokers
Nov 26th, 2014 | By FCT
“…The entrepreneur’s business is their artwork. The creation of business is as creative as any creation in art. In fact, building a business may be the most creative human activity of all.”
~ C.K. Prahalad (1941-2010)| distinguished professor of business, University of Michigan | best-selling Harvard Business Review author
CAAMP 2014 | cracks all over the mortgage marketplace—or just historical blips?
Ratesupermarket’s field work isn’t alone: CAAMP’s 2014 data is laced with subtleties too.
The baseline data is quite stable—except for what appears to have been a spike in brokered mortgage market share in 2013, which returned to historical levels (quite mysteriously, admits CAAMP) in 2014.
But there’s more:
* Mortgage credit growth in Canada has averaged 8.1% per year during the past decade.
* The mortgage growth rate has slowed, and is currently 5.2% year-over-year (as of August). The growth rate is likely to slow even more, albeit gradually during 2015 (to about 4.5% by year end).
* By the end of 2015, total outstanding residential mortgage credit is forecast at $1.34 trillion, up from the most recent figure of $1.26 trillion (as of August 2014). By the end of 2016 the figure may be close to $1.4 trillion.
The tale behind the numbers hangs on two salient trends: CAAMP emphasizes that the mortgage policies that took effect in July 2012 continue to have a negative impact on the housing market and, in turn and in parallel, persist as a drag on the larger economy.
The evolving marketplace—even accounting for the impacts of the mortgage insurance criteria changes two years ago—is stratifying. CAAMP suggests that simply examining housing indicators from nationally—the ‘30,000 foot view’—masks wide divergences across the country.
CAAMP notes that a few major centres have very hot housing markets, but in many areas of Canada housing markets are weak, which in aggravates the economic stresses on those stagnant or contracting markets. For these less fortunate centres, a blanket government policy designed to cool mortgage markets is unnecessarily harsh: the continued suppression of housing activity in the more fragile markets is, CAAMP believes, unnecessary.
The upcoming COMPASSpoint white paper examines CAAMP 2014 in depth, as well as intriguing trends in self-directed mortgages and marketing communications. Stay tuned: there’s a great read ahead.