New data compiled by CIBC World Markets has revealed subprime lenders’ share of the Canadian mortgage market has reached record levels.
This, according to the report, puts additional risk on the country’s housing market.
Figures show alternative lenders underwrite 2.2% of all mortgage loans today. It may not be enough to cause any major structural damage in the event of defaults, but their market share has exploded, the report said.
Based on Statistics Canada figures derived from Revenue Canada information, the value of loans from alternative lenders rose by 25% in 2013 while the overall market for mortgages jumped 4%.
The figures do not include credit unions, said Benjamin Tal, deputy chief economist with CIBC.
“It’s a small segment of the market still, but it is rising quickly,” Tal was quoted by Financial Post.
Tal added “there is little doubt the loans in the alternative lending space are subprime ones that none of the major lenders will take”.
This, according to the report, puts additional risk on the country’s housing market.
Figures show alternative lenders underwrite 2.2% of all mortgage loans today. It may not be enough to cause any major structural damage in the event of defaults, but their market share has exploded, the report said.
Based on Statistics Canada figures derived from Revenue Canada information, the value of loans from alternative lenders rose by 25% in 2013 while the overall market for mortgages jumped 4%.
The figures do not include credit unions, said Benjamin Tal, deputy chief economist with CIBC.
“It’s a small segment of the market still, but it is rising quickly,” Tal was quoted by Financial Post.
Tal added “there is little doubt the loans in the alternative lending space are subprime ones that none of the major lenders will take”.
