Mortgage Company of Canada Reacts to Study Showing GTA Residents Worried about Housing Costs

Toronto, Canada, December 7, 2015 – Mortgage Company of Canada, Inc. (www.www.mcoci.com), a mortgage investment corporation that offers high yielding mortgages secured primarily by residential real estate located in the Greater Toronto Area (GTA), comments on a poll showing that most people living in the GTA are worried about the affordability of housing.

According to the poll, in which 1,500 residents were surveyed, 70% are concerned about their ability to afford their next home: about 39% said they were very concerned while 31% said they were somewhat concerned. When asked if they had fears about their children’s ability to afford a home in the future, the vast majority (78%) said they believe their children will face challenges with affording a home. Roughly half (46%) of that majority is very worried about their children’s ability to purchase a home. (Source: Tuckey, B., “Affordable housing top of mind in the GTA,” thestar.com, November 28, 2015; http://www.thestar.com/life/homes/2015/11/28/affordable-housing-top-of-mind-in-the-gta.html.)

“With soaring real estate prices in the GTA, housing affordability has become a real matter of interest for both first time home buyers and those looking to step up the property ladder,” says Raj Babber, president and CEO of Mortgage Company of Canada. “In addition to rising property values, other issues—such as strict government housing policies and conservative banking practices—make it difficult for the average Torontonian to buy a house.”

Babber also explains that government taxes and fees are major hurdles when it comes to buying a home in the GTA. For example, government fees and taxes account for an average of one fifth (or 20%) of the cost of a new home in the GTA. On top of that, homebuyers with less than a 20% down payment need to get mortgage default insurance when borrowing from a bank. Those in the GTA who are unable to purchase a home through a bank are turning to private mortgage lenders to access the Toronto housing market. In fact, alternative lenders now make up about 5% of Canada’s overall mortgage market. And that number is only expected to grow with demand outstripping supply and interest rates near historic lows. (Source: Hopkins, A., “Shadow mortgage lending on the rise as house prices soar,” CBC News, July 9, 2015; http://www.cbc.ca/news/business/shadow-mortgage-lending-on-the-rise-as-house-prices-soar-1.3144317.)

“While Toronto real estate continues to be an excellent investment opportunity, most do not have the available cash flow to buy multiple properties. One of the best ways to capitalize on record Toronto real estate prices is to invest in high-yielding residential real estate mortgages—ones that have limited exposure to more speculative markets,” Babber concludes. “A mortgage investment corporation (MIC) provides alternative lending services to residential and commercial borrowers. Through a diversified pool of mortgages, Canadians can bolster their retirement portfolio with high-yielding investments.”

Mortgage Company of Canada Inc. is a mortgage investment corporation whose objective is to provide investors with an attractive risk-adjusted return by primarily investing in first and second residential mortgages on single family low-rise homes in the GTA. Mortgage Company of Canada’s experienced management team employs a focused lending strategy and follows rigorous underwriting analysis. To learn more about Mortgage Company of Canada, visit the company’s web site at www.www.mcoci.com.