Category Archives: CMHC

CMHC: Pandemic will affect housing market until 2022

They expect a 25% drop in some regions:

Canada’s national housing agency says the number of new homes being built and sold will remain below the levels they were at before COVID-19 until 2022 at least, and prices won’t get back to where they were for another two years either.

In a special report, the Canada Mortgage and Housing Corporation said Wednesday that the COVID-19 pandemic will lead to a “historic recession in 2020,” which will lead to “significant falls in indicators of the housing market.”

Just like the flu, but more so!

Record construction with falling prices

Mo’ houses, mo money?

Canada Mortgage and Housing (CMHC) reported that Metro saw developers start construction on 28,141 new homes in 2019, up 20 per cent from 2018, with a substantial number of those, some 6,727, purpose-built rental units.

The CMHC report came out on the same day that Royal LePage released its latest house-price survey showing that aggregate home prices across the region declined 4.8 per cent in the fourth quarter of 2019 but in a market showing signs of recovering sales.

Read the full article here.

Everybody wants to help you buy a house

Pointed out by southseacompany: all the major political parties want to help you buy a house and the promises are piling up.

They all love the idea of taking taxpayer money to drive up house prices, the current government even wants to get in on the speculation and help out with a 5-10% shared equity program.

The government also confirmed that, because the program gives it an equity stake in the mortgage, it will share any gains or losses in the value of the home over the life of the loan. Any money the government makes on the program will go back into general revenues.

Read the full article here.

How resilient is CMHC to a US style housing crash?

Kabloona points out this article asking yet again how this country would fare in a US style housing market crash, but particularly how the CMHC would fare:

Canada Mortgage and Housing Corp., which protects financial institutions in the case of consumer default and is 100 per cent backed by Ottawa, said in a release Wednesday that it looked at anti-globalization, earthquakes, a steep oil price fall and a U.S.-style housing correction to see how its insurance portfolio would hold up. It did not look at a combination of any of those scenarios.

The verdict is a U.S.-style correction would be its worst scenario for its insurance program with a cumulative loss of $217 million from 2017 to 2022 which would come on top of a need for the Crown corporation to suspend its dividends to Ottawa. CMHC paid Ottawa a special dividend of $4 billion in June because of excess capital and issued a $240 million dividend in August.

Read the full article here.