Following a nationwide slowdown in the Canadian Real Estate sector, home sale activity declined 11.3% year over year in April, it appears Canadian banks could soon feel the pinch. One of Canada’s more aggressive mortgage lenders, CIBC, announced it expects new mortgage originations to fall roughly 50% in the back half of this year. CIBC’s Canadian retail banking head Christina Kramer said new policies such as the mortgage stress test are having an impact on sales of mortgages. “We expect there to be an origination decline in the 50 per cent range relative to the same period last year, A year ago, two-thirds of our revenue would be related to our mortgage business and today that’s about a quarter.” While CIBC still expects their overall mortgage portfolio to grow in the low single digits during the second half, compared with 7 per cent in the latest quarter and 9 per cent in the previous quarter this slowdown in mortgage growth has much wider implications on CIBC and the Real Estate market moving forward. CIBC has been chips all in on Canadian Real Estate. As of Q3 2017 their uninsured lending growth reached 12% growth year over year, That’s nearly triple the industry average. Canadian mortgages as a percentage of their total loan book makes up about 60% per recent data.

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