(Bloomberg) -- Royal Bank of Canada’s mortgage clients are wealthier than they used to be. That’s good for the bank’s credit quality, but it’s a depressing statement about the struggle younger people face to buy a home, according to a senior executive.
“We’re seeing the overall income and net worth of a mortgage buyer increase over time,” Neil McLaughlin, head of RBC’s personal and commercial banking unit, said Thursday on a conference call with analysts. Describing the trend as “a bit of a systemic issue,” he added that first-time buyers are “becoming less and less a part of our portfolio.”
Canada’s housing market has been on a tear for years, pushing prices in some cities far beyond the reach of many middle-income earners. The benchmark price of a home in Toronto and Vancouver exceeded C$1.3 million ($1 million) in April, according to the Canadian Real Estate Association. That’s up 65% in Toronto and more than 40% in Vancouver over a five-year period.
“It is a bit of a sad commentary in terms of young people being able to get into some of these markets,” McLaughlin said.
RBC, Canada’s largest bank, said its domestic residential mortgage book grew to C$344.8 billion in the quarter ended April 30, up 11% from the prior year.
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