Market Trends of Canada Home Equity Lending Industry
This section covers the major market trends shaping the Canada Home Equity Lending Market according to our research experts:
A Rise in Home Prices Boosting Home Equity Lending Market
Housing Prices in Canada will keep rising in 2022. The average price for a home in Canada increased around 17% year-over-year in the fourth quarter of 2021, reaching USD 779,000. In most housing markets, prices increased by more than 3% compared to the third quarter of 2020. The majority of the rise in house prices was seen across much of Ontario, primarily in the Greater Toronto Area and most major cities in British Columbia.
This increase is majorly driven by detached, single-family homes whose average price grew by nearly 21 % compared to the end of 2020. Meanwhile, condominiums rose by 15.8% in 2021. Due to the rise in real estate, Canadian home equity line of credit (HELOC) payments have surged in Q3 2021, up 0.7% from the previous quarter.
Skyrocketing HELOC (Home Equity Lines of Credit) Borrowing Driving the Market:
HELOC products, along with combined mortgages, grew to USD 710.3 billion in 2021, accounting for 41% of total real estate secured lending. Their share rose from 37% in the first quarter of 2019. The volume of new HELOCs being created increased by nearly 57% in the second quarter of 2021 compared to the same period in 2020. Low-interest rates were fuelling a resurgence in Home Equity Lines of Credit (HELOC).
