Mortgage growth will be low or flat this year: CIBC CEO
Victor Dodig made the comments at a conference of banking CEOs Tuesday
Canadian mortgage growth will be flat or in the low single digits for the "foreseeable future," according to the Canadian Imperial Bank of Commerce's chief executive.
When asked during a Toronto industry conference whether Canadian mortgage growth could turn negative, Victor Dodig replied: "That depends if the housing market goes for a really negative turn driven by other macroeconomic factors. That could happen.
"I think in the foreseeable future, I see more flatness to low single-digit growth in that overall category, for Canada."
The CIBC chief's comments at the RBC Capital Markets Banking CEO conference on Tuesday come after the Canadian Real Estate Association said national home sales are projected to fall to a near-decade low this year.
Home sales down 3 months running
The latest national home sales figures showed that home sales dropped by 2.3 per cent in November from the previous month for the third month in a row.
CREA last month said rising interest rates and strict mortgage stress-test rules continue to weigh on homebuyer sentiment. The Bank of Canada is widely expected to hold its key interest rate steady at 1.75 per cent at its next policy announcement on Jan. 9, but the central bank has introduced five hikes since the summer of 2017 in response to the stronger economy.
Meanwhile, a new stress test for uninsured mortgages to gauge whether borrowers would be able to service their mortgage if interest rates went up took that took effect on Jan. 1, 2018, made it hard for some would-be homebuyers to qualify.
However, some federally-regulated banks have said they have seen an uptick in mortgage renewals as the new underwriting guidelines do not apply to those who decide to stick with their current lender.
Toronto-Dominion Bank chief executive Bharat Masrani told the conference on Tuesday that he expects mortgage growth in the mid-single digits for 2019.
The Bank of Nova Scotia's chief executive Brian Porter said "early indications" have been positive, but performance during the key spring real estate period are more important.
"Mortgage activity for the first couple months of this year has been really quite strong … We'll see what happens in the spring season."