4.5% between 2006 and 2016. CMHC cited increased labour force participation as the major factor driving the trend. “With more seniors working, fewer have been reliant on income from government sources compared to a decade ago,” the report said. “Among homeowners, there has been a strong increase in the share of retirees for whom pensions (public and private) were their primary source of income. These trends have translated into faster income growth for seniors.”
“Canadians are getting older, and there is an opportunity there” In 2016, the median income for a household headed by a senior surpassed $59,000, with homeowners driving the income growth, CMHC revealed. Meanwhile, the share of senior renters has fallen. In 2006, 43.3% of seniors were renters; by 2016, this had declined to 41.9%. CMHC also noticed a shift in the type of housing preferred by senior renters, from purposebuilt apartments and condominiums to “ground-oriented homes” like single-detached houses, semis and townhouses, which the organization attributed to a “declining vacancy rate of rental apartments.”
Q&A
AJAY KAITH President of mortgage originations Oppono Lending Company
Years in the industry 12 Fast fact A private lender focused on the GTA and Golden Horseshoe, Oppono Lending Company currently has around $300 million worth of mortgages under administration
Still going strong How has Oppono Lending Company been doing lately? We’ve been doing quite well. This year marked our 10th anniversary in funding first and second residential mortgages, and we’re consistent – in fact, almost doubling every single year. This year, our main focus has been to become more streamlined in our complete process, striving for quicker turnaround times. We’ve hired additional staff and created new departments within our company to accommodate this growth. Also in 2019, we’ve gained an additional facility – in essence, another channel to raise capital.
What impact did last year’s B-20 changes have on your business? These changes have been actually a positive to us. Because it’s now tougher for consumers to go to traditional providers like banks and monoline lenders, we’ve seen higher-quality clients come to us. With better-quality clients come fewer defaults, and hence a better total portfolio. We now actually have a stronger portfolio than we’ve ever had in the past 10 years. We can now fund larger mortgages, leading to a healthier split between our first and second mortgages. We’ve also seen existing clients, now that they have better quality as well as our lower pricing, stay with us longer. Consumers have actually become more educated with time, which is why they now understand the process and recognize that we’re not the bad guys here.
How do you help brokers assist their clients? We’ve always used the broker channel since day one; we don’t actually advertise to the general public. It’s important to educate brokers. Not all brokers have an understanding of the benefits of the private space. And now that consumers are more aware of the process, brokers really need to keep up. Brokers will be able to provide the correct solutions for their clients’ needs only if they have the right knowledge.
In this environment, what should industry players look out for? Compared to the last five years, there are more industry players than ever. Starting a mortgage investment corporation or a private lending company right now is very easy. What industry players should be vigilant of is knowing their brand and knowing the extent to which their brokers can service their clients. You’ve got to be careful of brokers pretending to be lenders or lenders saying that they have this astronomical volume of funds at their disposal, but they actually don’t. Also, this is an election year, and we could see some market volatility. We’re likely going to see a more conservative approach from the government in any policy changes.
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