Royal Bank 'Closely Monitoring' Housing Markets in Vancouver, Toronto: CEO

According to Royal Bank CEO, David McKay, RBC is monitoring and keep track of Vancouver and Toronto real estate markets. The prices of homes in Vancouver and Toronto real estate markets have been increasing at a rapid pace.

David McKay stated that strong price appreciation of homes have been influenced by the short supply of single-family homes in both Vancouver and Toronto along with strong demand created by household formation, including net immigration.

He also stated that Royal Bank has sensible underwriting practices in place as well as the required technology to closely keep an eye on these housing markets and quickly react as situations may transpire.

Jim Shanahan, an analyst from Edward Jones Investment Firm, mentioned that more than half of RBC's $531 billion loan book is made up of Canadian residential real estate loans like home equity lines of credit and mortgages.

Other data from the lender indicates that home ownership costs for a single detached house in Toronto were 71.4 per cent of the median household income. In Vancouver, home ownership costs were at 109 per cent of the median household income.

Chief Risk Officer at RBC, Mark Hughes said that the bank has a diligent process for verifying incomes of borrowers. He also said that the lender does not participate in the second mortgage market or offer subprime mortgage loans. According to Hughes, 48 per cent of the loan portfolio is insured, up from 46 per cent in 2015.

Reference:

Vancouver Sun

http://vancouversun.com/…/royal-bank-closely-monitoring-hou…