Brampton has become a major flashpoint in Canada’s mortgage stress, with new data showing the city has the highest mortgage delinquency rate among larger Canadian municipalities, according to a Globe and Mail report citing Equifax Canada.
The report found Brampton’s mortgage delinquency rate, defined as homeowners missing payments for at least 90 days, has risen faster than the national rate. By the final quarter of last year, 0.6 per cent of outstanding mortgages in Brampton were delinquent, compared with 0.26 per cent across Canada. In 2019, Brampton’s rate stood at 0.06 per cent, while the national rate was 0.18 per cent.
“What we’re seeing in Brampton is the result of several pressure points landing on the same market at the same time,” said Rakhi Madan, a mortgage broker with more than 15 years of experience in Brampton.
The Globe and Mail report said one in every 20 homes listed in Brampton is now a power-of-sale property, according to Jackson Scarfe, a realtor with Re/Max Plus-City Team Inc. who specializes in forced-sale properties. Across the rest of Ontario, the figure is one in 50, based on Scarfe’s MLS research.
Scarfe said many Brampton homeowners facing power of sale bought during the pandemic housing boom. Since then, home prices have fallen sharply, leaving some owners with limited equity and fewer refinancing options.
Toronto Regional Real Estate Board data cited in the report shows Brampton’s typical home price rose from $638,700 in 2019 to $1.24 million in early 2022 before falling 30 per cent to $855,000 in March.
Brampton is also showing more distress than nearby Mississauga. In the first three months of this year, 14 Brampton homes sold under power of sale, compared with six in Mississauga, according to Sattar Erfanian Pour, a realtor with HomeLife/Bayview Realty. Last year, Brampton recorded 43 forced sales, compared with 13 in Mississauga. In 2022, Brampton had five and Mississauga had three.
“There is growing financial pressure in the market,” he said.
The pressure is expected to continue as mortgages issued in 2021 and 2022 renew at higher rates. The Office of the Superintendent of Financial Institutions estimates about 1.3 million fixed-payment mortgages, or 22 per cent of Canada’s total, are up for first renewal and will “experience material monthly payment increases.”
“It is about the concentration of risk,” Madan said. “More households here are managing high housing costs, larger family obligations, and less margin for error at exactly the moment mortgage payments are resetting higher.”
