Mortgage arrears in Alberta drop, but expert warns uptick coming soon

Aerial views of housing in Calgary. (Jonathan Hayward / THE CANADIAN PRESS)

The number of homeowners who are behind on their mortgage payments in Alberta has reached the lowest level seen in years, but an expert warns those numbers could tick upwards later this year.

According to data released by the Canadian Bankers Association (CBA) on Feb. 7, mortgages in arrears in Alberta – where payments are overdue by three or more months – have dropped to rates not seen in a decade.

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The data shows there are a total of 585,428 mortgages in Alberta.

Of those, 1,725 were in arrears by the end of November 2024, or 0.29 per cent – the lowest percentage the province has seen since 2015.

The data for Alberta also includes mortgages in the Northwest Territories and Nunavut.

“If you go back even 12 years in Calgary, the delinquency rate was about 0.6 percent, so more than three times as much as it is now,” said Alex Ciappara, vice president and head economist at the CBA.

“The primary driver of those lows are employment conditions and labour conditions, and the labour market is frankly quite strong in Alberta.”

Ciappara says Calgary’s population growth is also playing a role.

“In the long run, we’ve seen unemployment rates come down, and that’s fueled by higher oil and gas prices,” he said.

“You’re also seeing demand for housing increase, and that provides a boost to the housing market. If supply goes up slowly but demand goes up much faster – and we’ve seen population growth in Alberta increase by about 12 per cent – that’s going to provide a natural support to housing markets as well.”

Canada’s percentage of mortgages in arrears is 0.21 per cent of 5,013,272 total mortgages.

Ciappara said Canadians have consistently maintained low rates of mortgages in arrears even throughout challenging periods such as the global financial crisis and COVID-19 pandemic, but he warns that trends are changing entering the new year.

“We’re beginning to see unemployment rates increase, labour markets beginning to weaken a little bit, so we should expect arrears rates to increase as those employment rates increase as well.”

According to the Canadian Mortgage and Housing Corporation, 1.2 million Canadians are facing a mortgage renewal in 2025, which could cause mortgage delinquencies to rise.

The highest rate of mortgage arrears was seen in Saskatchewan at 0.59 per cent, while the lowest was tied between Quebec and British Columbia at 0.17 per cent each.