{"id":709,"date":"2020-02-25T02:51:26","date_gmt":"2020-02-25T02:51:26","guid":{"rendered":"https:\/\/www.realestateleads.ca\/blog\/?p=709"},"modified":"2023-09-26T21:04:28","modified_gmt":"2023-09-26T21:04:28","slug":"vancouver-following-rest-of-canadas-lead-with-sharp-rises-in-insolvencies","status":"publish","type":"post","link":"https:\/\/www.realestateleads.ca\/blog\/vancouver-following-rest-of-canadas-lead-with-sharp-rises-in-insolvencies\/","title":{"rendered":"Vancouver Following Rest of Canada\u2019s Lead with Sharp Rises in Insolvencies"},"content":{"rendered":"
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Everywhere you look these days you hear about how Canadians are carrying dangerously high levels of debt, and that many times the bulk of their dangerous debt is related to the roof over their head. Real Estate Agents will be better situated than most to know what the term \u2018house poor\u2019 means, and there\u2019s a lot of people that are in nearly-over their heads in this way. This is particularly true in high demand, lower supply housing markets that are also popular destinations. That of course describes Toronto and Vancouver most explicitly, and to a lesser extent cities like Montreal and Calgary.<\/p>\r\n\r\n\r\n\r\n

Homeowner insolvencies are increasing quite significantly all across the country, and whether they are for consumer proposals or bankruptcies it\u2019s not only a major calamitous event for the homeowner and mortgage holder. It also send negative shockwaves through the prospective-homebuyer crowd and in the chill it can put on them is a negative factor for realtors who would either be helping them find a home or selling one to them on behalf of a client. There\u2019s some insulating factors related to the market in Canada that take the edge off that, but it still makes the business a little more challenging.<\/p>\r\n\r\n\r\n\r\n

Client prospecting can be more challenging for any number of reasons \u2013 consumer trepidation and uneasiness among them. Our online real estate lead generation service here at Real Estate Leads is an excellent way to harness the power of the Internet to be more immediately put in touch with people who are genuinely considering buying or selling a home in the near future. Being in touch with them first because of the service provides you with very obvious benefits.<\/p>\r\n\r\n\r\n\r\n

But back to topic, what should be read into all these insolvencies when it comes to homeowners in Canada?<\/p>\r\n\r\n\r\n\r\n

A Genuine Spike in Home Forfeitures via Insolvency<\/strong><\/h3>\r\n\r\n\r\n\r\n

Greater Vancouver is following the rest of Canada\u2019s lead when it comes to this spike in insolvencies. We need look no further than the National Office of the Superintendent of Bankruptcy (OSB) and their data to see households filed a lot more insolvencies in Q4 2019. It\u2019s interesting to note that Vancouver\u2019s growth in them is showing itself to be consistent with elsewhere in the Province. However, there\u2019s no debate that BC is seeing a very rapid rise in the number of distressed households.<\/p>\r\n\r\n\r\n\r\n

Insolvencies Vs Bankruptcies<\/strong><\/h3>\r\n\r\n\r\n\r\n

Bankruptcy tends to be a term that everyone\u2019s familiar with, and fears accordingly. But many, real estate agents in Canada included, may not know the difference between a bankruptcy and an insolvency. There\u2019s two types of insolvency in Canada \u2013 consumer proposals and bankruptcy.<\/p>\r\n\r\n\r\n\r\n

With a consumer proposals the individual enters into a formal agreement with creditors to repay debt, doing so at a fraction of the amount and \/ or over a longer repayment period. Oppositely, a bankruptcy is when the borrowers gives up their assets in return for being no longer responsible for the debt. In both cases it\u2019s really not quite that simple, but that explanation works well enough for our purposes here. Both are administered by a licensed insolvency trustee (LIT) and it\u2019s fair to say that every time it gets to this point the person or entity has been swimming in debt.<\/p>\r\n\r\n\r\n\r\n

If the debt is less considerable then the person can hope for a consumer proposal. Of course, homes in Canada and especially in popular locales are NEVER purchased for less than a considerable amount and most buyers will have a mortgage on half of the purchaser price or more (usually much more).<\/p>\r\n\r\n\r\n\r\n

So we can then see that the majority of homeowners who going into insolvency with their home buying debt are going to be facing bankruptcy. In certain situations, however, bankruptcies are a better option for the borrower.<\/p>\r\n\r\n\r\n\r\n

How serious is this problem, and is it an indication of something bigger like what occurred in America some 12 years ago? The second part of that would be a speculative discussion of its own, but we will take a look at how insolvencies are jumping in numbers in Vancouver.<\/p>\r\n\r\n\r\n\r\n

End of 2019 Insolvency Spike in Greater Vancouve<\/strong>r<\/h3>\r\n\r\n\r\n\r\n

Greater Vancouver insolvencies did take quite the leap at the end of last year, to the tune of 1,284 insolvency filings in Q4 2019, and that was up 12.2% from the same period in 2018. 398 of those were bankruptcies, and that\u2019s a jump of 5.6% from a year before. Consumer proposals make up the other 886 filings, up 15.5% from last year. While the GVA is seeing much faster growth than the national average, it\u2019s still less than in Greater Toronto.<\/p>\r\n\r\n\r\n\r\n

We will also add further that Canadian insolvencies are on the rise as a whole, and in fact last year there was the highest number of them since the Great Recession. We can probably safely assume that British Columbia\u2019s rapid growth and housing crisis is prompting people to get in over their heads with the real estate market. This kind of \u2018urgency\u2019 to making a move in real estate has been seen time and time again over many decades, but it may be at its most feverish right now for people in BC, and Vancouver in particular.<\/p>\r\n\r\n\r\n\r\n

As a realtor, part of your responsibility to your client is to advise them as to where making offers on properties may not be in their best interest given their established purchasing power. Of course, the client\u2019s wishes are never overruled, but it doesn\u2019t hurt to at least try to steer them in the right direction in this regard.<\/p>\r\n\r\n\r\n\r\n

Sign up for Real Estate Leads here<\/a> and receive a monthly quota of qualified, online-generated leads that are delivered to you \u2013 and ONLY you \u2013 as the ONLY realtor serving your exclusive region of any city or town in Canada. Sign up, claim your region (provided it\u2019s still available \u2013 act quickly!) and then start taking advantage of a resource that will almost certainly become a great investment and very valuable part of how your market your real estate services and build your client base.<\/p>\r\n","protected":false},"excerpt":{"rendered":"

Everywhere you look these days you hear about how Canadians are carrying dangerously high levels of debt, and that many times the bulk of their dangerous debt is related to the roof over their head. Real Estate Agents will be better situated than most to know what the term \u2018house poor\u2019 means, and there\u2019s a […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-709","post","type-post","status-publish","format-standard","hentry","category-general-topics"],"yoast_head":"\nVancouver Following Rest of Canada\u2019s Lead with Sharp Rises in Insolvencies - Real Estate Leads Blog<\/title>\n<meta name=\"description\" content=\"Vancouver Following Rest of Canada\u2019s Lead with Sharp Rises in Insolvencies - Real Estate Leads Blog\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.realestateleads.ca\/blog\/vancouver-following-rest-of-canadas-lead-with-sharp-rises-in-insolvencies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Vancouver Following Rest of Canada\u2019s Lead with Sharp Rises in Insolvencies - 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