The mortgage space is seeing steady demographic changes
Amid the steady demographic changes in the Canadian mortgage market, one of the major priorities of market players is to ensure that they will be able to continue providing the same quality of products and services to new and current clients alike.
Grant Armstrong, director, originations at Community Trust, said that the company is constantly examining its credit policies so that it can adapt to demographic shifts.
“The gig economy is huge now,” Armstrong told Canadian Mortgage Professional recently. “Ten to 15 years ago, it was ‘job letter, pay stub, or tax returns.’ Now it’s ‘job letter, pay stubs, bank statements, contracts, TikTok number of subscribers on an application.…’”
By and large, lenders have adapted to these changes – and this is an area where brokers have to catch up to.
“You’re seeing types of incomes that we’ve never seen before,” he said.
This also applies when handling transactions involving clients who are facing the prospect of significantly higher interest rates.
“For a lot of alternative lenders, it was one-to-three-year terms [during the pandemic],” Armstrong said. “So we’re now seeing those clients coming up [and] getting an earlier glimpse of some of the changes, and we’re able to try to find solutions to help them manage their new cashflow dynamic.
“The rates aren’t changing. They are what they are today and they’re not coming back down by 4%, 5%, 6% in the next 12 months. So it’s, ‘How do we help Canadians evolve through their next [stages] of financial lifecycle?’”
New national census figures released by Statistics Canada last week contained some intriguing revelations about the country’s current demographics – not least where its housing and mortgage markets are concerned.https://t.co/Cxj9VIWror
— Canadian Mortgage Professional Magazine (@CMPmagazine) May 10, 2022
This will herald a greater need for lender-broker collaboration over the next few quarters, further stressing the need for rapid adaptability, Armstrong predicted.
“What you’re going to see is [business development managers] picking up the phone, calling and saying, ‘Can I learn your business better so I can help you?’” Armstrong said. “You’re also going to see lenders look at their policies.
“Nobody’s scaling back. Nobody’s prepping for a downward market. Lenders are investing in the future. They’re investing in their sales teams. You don’t invest in sales teams if you don’t think there are going to be sales.”
“They’re investing in their processes … I think you’re going to see a good market in 2024.”
Read now: Why there’s plenty of room for optimism in Canada’s mortgage market
