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Nunavut's foreclosure rate at seven per cent Jeanne Gagnon Northern News Services Published Monday, September 5, 2011
Two law students viewed 108 files, representing all foreclosure files available from April 1999 to June 2011 with the Nunavut Court of Justice, and viewed 80 leaseholds at the Land Titles Office. In the provinces, 0.43 per cent of mortgages are in arrears - meaning late payments for three months - out of the slightly more than 4.1 million mortgages, according to data from the Canadian Bankers Association. Nunavut Housing Corporation president Alain Barriault said he did not expect Nunavut's default rate to be this high, speculating it might be because the data is statistically small. "Off hand, I'm thinking seven per cent of mortgages going into foreclosures seem very high," he said. "I would want to review the data before commenting on that. I'm thinking one in 20 mortgages is way too many. That's a very high number." Public housing occupies the majority of Nunavut's housing market. In the territory, only 22 per cent of dwellings are privately-owned. As Nunavut has a very small private housing market, any default can be huge statistically, said Shannel Rajan, one of the findings' authors. The findings also show the high rate is an indication of market immaturity in Nunavut. "In the major economic communities, being Iqaluit and Cambridge (Bay) and Rankin, the default rate is quite low compared to the smaller communities where the default rate is really high," she said. In Iqaluit, Rankin Inlet and Cambridge Bay, the default rate was 4.6 per cent, state the preliminary findings. In Taloyoak, about 26 per cent of bank mortgages defaulted in the last 12 years, followed by Repulse Bay with about 17 per cent and Clyde River with about 14 per cent. No foreclosures occurred in Grise Fiord, Kimmirut, Qikiqtarjuaq or Resolute. Jimmy Oleekatalik, Taloyoak's economic development officer, said a lack of jobs and the reality of one working individual supporting many others on his or her salary might explain the numbers. "From the 2006 census, 850 people, 200 houses, 120 jobs. Do the math, eh," he said. "It (overcrowding) is not as bad today as it was in 2006, but it's still the same amount of jobs and the population is growing." Rajan said the trend in foreclosure rates appears stable. The worst year for bank mortgage defaults in Nunavut was 2001 with 15, followed by 2002 and 2003 with 11 each and 2000 with 10 defaults. Files viewed showed an average mortgage of $113,000 at time of purchase and home owners who defaulted did so an average of 4.7 years after purchase. Banks own seven homes in Nunavut, she added. The report states the factors driving foreclosures in the territory are the cost of home maintenance, isolated economies, limited access to banks and other lenders, very limited access to legal and financial counselling and all respondents being first-time buyers. Issues common nationwide, such as job loss, divorce and death, are also contributing factors, state the findings. Barriault said NHC has home-repair programs available to people who meet the income guidelines. "It appeared to be situations where people ran into maybe unexpected costs, that they hadn't budget for or strained their financial ability to maintain their housing," he said. "As a home owner, you do have to realize your furnace is not going to last forever and your fuel tank, at some point, may need replacing."
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