CMHC Releases 2017 Third Quarter Financial Report

Canada Mortgage and Housing Corporation (CMHC) has released its 2017 third quarter financial report, as well as supplemental data on its Mortgage Loan Insurance, Securitization, and Covered Bonds business activities. New this quarter is the addition of Assisted Housing supplemental data. "CMHC continues to deliver results for Canadians. The Government, through CMHC, is making unprecedented investments to help Canadians in housing need as part of the National Housing Strategy. Commercially, we continue to manage our mortgage loan insurance and securitization operations in the best interests of long-term financial stability." Wojo Zielonka, Chief Financial Officer and Senior Vice-President, Capital Markets HELPING CANADIANS IN HOUSING NEED CMHC provides federal funding in support of housing programs for Canadians in need, including on-reserve. During the quarter, CMHC provided some $520 millionfor housing programs on behalf of the Government of Canada. During the nine months ending September 30, 2017, CMHC has:
  • Provided more than $2.6 billion for housing programs on behalf of the Government of Canada to help Canadians in need.
  • Supported more than 122,500 households across Canada since April 2016 in affordable and social housing through the Social Infrastructure Fund, which targets programs such as the renovation and retrofit of social housing, seniors' housing and shelters for victims of family violence.
  • Signed the first commitment under the Rental Construction Financing Initiative
FACILITATING ACCESS TO HOUSING Mortgage loan insurance enables Canadians to purchase homes with a down payment starting at 5%. CMHC is also Canada's only provider of mortgage loan insurance for multi-unit residential properties, facilitating the creation of rental housing for Canadians. CMHC provided mortgage loan insurance for more than 63,500 new units in the third quarter, for a total of more than 189,000 new units year-to-date. Volumes have decreased largely as a result of the new regulations announced in the fourth quarter of 2016. As a result, CMHC's total insurance-in-force decreased to $484 billion as at September 30, 2017, a decrease of $28 billion from the end of 2016. The quality of CMHC's mortgage loan insurance portfolio remains strong, which is reflected in an overall arrears rate of 0.30%. As well, for the nine months ending September 30, 2017, the typical CMHC-insured borrow had, on average:
  • Loan amount of $260,577
  • Credit score of 752
  • Total debt service (TDS) ratios of 36.6%
CMHC's securitization programs enable Canadians to better access mortgage financing by facilitating access to funds for residential mortgage lending by approved financial institutions. They also provide investors with opportunities to hold high quality, secure investments that support the Canadian residential mortgage market. For the nine months ending September 30, 2017, new securities guaranteed totalled $113 billion. This consists of:
  • $82.8 billion for National Housing Act Mortgage-Backed Securities.
  • $30.2 billion for Canada Mortgage Bonds.
DELIVERING RESULTS FOR CANADIANS CMHC's mortgage loan insurance and securitization guarantee programs operate on a commercial basis without the need for funding from the Government. As a result of these activities, CMHC has:
  • Generated third quarter net income (after taxes) of $467 million.
  • Approved a dividend of $290 million, payable to the shareholder, the Government of Canada.
The dividend balances returning excess capital to our shareholder while retaining sufficient capital to protect against housing market risks. CMHC remains well capitalized with current capital holdings of 179% of OSFI's regulatory capital requirements for mortgage insurers. CMHC helps Canadians meet their housing needs. As Canada's authority on housing, we contribute to the stability of the housing market and financial system, provide support for Canadians in housing need, and offer objective housing research and advice to Canadian governments, consumers and the housing industry. Prudent risk management, strong corporate governance and transparency are cornerstones of our operations. SOURCE Canada Mortgage and Housing Corporation

Category: Starion Blog

 

CMHC Releases 2017 Third Quarter Financial Report

Canada Mortgage and Housing Corporation (CMHC) has released its 2017 third quarter financial report, as well as supplemental data on its Mortgage Loan Insurance, Securitization, and Covered Bonds business activities. New this quarter is the addition of Assisted Housing supplemental data.

“CMHC continues to deliver results for Canadians. The Government, through CMHC, is making unprecedented investments to help Canadians in housing need as part of the National Housing Strategy. Commercially, we continue to manage our mortgage loan insurance and securitization operations in the best interests of long-term financial stability.”

Wojo Zielonka, Chief Financial Officer and Senior Vice-President, Capital Markets

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10 Stats that show Canadian Rental Demand is out of control

Photo: James Bombales
TowerPicsRental vacancy rates across Canada plunged this year, as demand for rental units outpaced supply.

According to the Canada Mortgage and Housing Corporation’s (CMHC) 2017 Rental Market Survey, the national vacancy rate for purpose-built rental apartments fell from 3.7 to 3.0 per cent in 2017, the first decline in the last two years.

“Nationally, increased demand for purpose-built rental apartment units outpaced growth in supply,” CMHC senior market analyst Gustavo Durango said in a statement. “Demand can be attributed to historically high levels of positive net international migration, improving employment conditions for younger households and the on-going aging of the population.”

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Your Tenant Secretly Wants to Buy Your Home 

“What’s going on with the rental market? There is nothing to rent. Everything is either leased or has 3 offers . . . or super expensive!!!”

“Went in with $150 over asking with extra months up front. Married couple. What more do you want? They had 10 offers on the place.”

“The listing agent informed me that we were the highest offer but the landlord decided to go with another one.” 

That’s a snippet of what we’ve been hearing lately. In short, the Toronto rental market is insane. The Toronto Star recently ran a story about average rent in Toronto passing the $2,000/month mark, an 11% increase year-over-year. But the average rent of a condo in Toronto has been above $2,000/month since July 2016, so it’s not really the price that’s the problem. It’s that supply is being pinched and demand is rising. This being the case, tenants are looking at other possible options and one of them is doing whatever it takes to pay their own mortgage and build equity instead of paying rent. Continue reading ..

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Photo: Ashley Fisher/Flickr

Here’s how many first-time buyers are opting for condos across major Canadian markets

Many first time buyers in Canada’s biggest cities are settling for less square footage when entering the housing market, but a new study from Genworth Canada tracks just how many are opting for condos over detached homes and townhouses.

According to the residential mortgage insurer’s 2017 First-Time Homeownership Study published this week, first-time homebuyers in the nation’s hottest markets are resorting to more affordable condominiums over detached homes and townhouses. Continue reading ..

Condos are king in the Greater Toronto Area and Heres why 

condo canada

 

Records continue to fall in the nation’s hottest housing market.

Condo sales were up 79% year-over-year in February and far outstripped home sales for low-rise units.

“In the GTA in February, there were more than twice as many new condo apartments sold (as) low-rise units,” the Building Industry and Land Development Association (BILD) said in its latest report. “Altus Group recorded 3,542 sales of condo apartments in stacked townhouses and mid and high-rise buildings, and 1,541 sales of new detached and semi houses and low-rise townhomes.”
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WHAT’s DRIVING VAUGHAN’S NEW DOWNTOWN??? TTC: A Tour of Vaughan’s Metropolitan Centre Station.

“I think this may be my favourite of the stations,” said Joanna Kervin, the director for Third-Party Planning and Property with the TTC‘s project to extend the Line 1 (Yonge–University) subway northwest to Vaughan. Kervin led members of the UrbanToronto team on a sneak-preview tour of the Vaughan Metropolitan Centre Station, the northern terminal for the extended line, which the TTC is planning to open at the end of 2017.  Continue reading ..

ont-economic-update-201511262016 Ontario Economic Outlook and Fiscal Review – Doubling the Maximum Refund for First-Time Homebuyers

Modernizing Land Transfer Tax and Other Tax Measures

Land Transfer Tax 

The Province is proposing to modernize Ontario’s Land Transfer Tax (LTT) system to reflect developments in the real estate market, by: 

  • Enhancing support for first-time homebuyers;
  • Updating LTT rates and brackets; and
  • Restricting the refund for first-time homebuyers to Canadian citizens and permanent residents.

Doubling the Maximum Refund for First-Time Homebuyers 

To help Ontarians buy their first home, the Province is proposing to double the maximum refund for first-time homebuyers from $2,000 to $4,000, effective January 1, 2017.
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Bank of Canada makes rate announcement

The Bank of Canada held the target for the overnight rate at ½% Wednesday.

Canada’s economy shrank in Q2, according to the BoC; however it’s still predicting a bounce back by the end of the year.

“Second-quarter GDP was pulled down by the Alberta wildfires in May and by a drop in exports that was larger and more broad-based than expected,” the Bank of Canada said in its announcement. “Exports disappointed even after accounting for weaker business and residential investment in the United States, adjustments in the resource sector, and cutbacks in auto production.”

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OREAINSIGHT

INSIGHTS – Home sales set new all-time record in May
Highlights
  • Residential sales up 9.3% in May 2016 compared to a year earlier.
  • New listings in Ontario numbered 40,432 units in May 2016, a decrease of 7.9% compared to last year.
  • The provincial average price of homes in May 2016 rose 12.8% compared to a year earlier.

Decade of Development to Transform Etobicoke’s Queensway

T’s not close to Downtown Toronto, and it’s not walking distance to a transit hub. Yet, in the stretch between Islington and Kipling Avenues, The Queensway could become one of Toronto’s most active development nodes. Though still lined with the strip plazas, warehouse industrial, and parking lots of older suburbia, the Etobicoke Street is attracting a huge wave of high-rise projects, with a 36-storey tower at 30 Zorra Street recently joining the neighbourhood’s proposed developments.

30 Zorra Street, Toronto, by MSAi

The east and south elevations (l-r) of 30 Zorra Street, image retrieved via submission to City of Toronto

Designed by MSAi, the 379-unit condo tower would join an area already being re-made by three phases of the Remington Group‘s IQ Towers. Located Continue reading ..