Mortgage delinquencies in Toronto have surged to their highest level in nine years, signalling distress in the city’s housing market, Better Dwelling reports.

The findings have implications for the condominium market, which largely dependent on first-time homebuyers who have difficulty securing mortgage.

According to data from Equifax, the delinquency rate for Greater Toronto mortgages rose significantly in the second quarter of 2024, reaching 0.16%, Better Dwelling reported. This level marks a 166% increase from its record low in 2022.

A delinquent mortgage is defined as one where payments are overdue by at least 90 days, according to the report. While rising delinquency rates are often viewed as an indicator of financial strain on households, experts caution this may instead reflect declining liquidity in the real estate market. Homeowners struggling to sell properties in a cooling market are more likely to fall behind on payments.

The rate increase has resulted despite intervention by policymakers, who have urged lenders to extend payment terms and adopt measures to prevent defaults. These efforts, however, appear insufficient to stem the tide of rising delinquencies, according to Better Dwelling.

This trend is in stark contrast to national averages, with Toronto experiencing a steeper climb than the rest of Canada. The latest data highlights the challenges faced by the city’s real estate sector as it contends with elevated interest rates, and slower market activity, Better Dwelling surmised.

Better Dwelling notes that these developments point to broader economic concerns, with implications for policymakers, lenders, and homeowners alike.

Photo: Destination Toronto