Housing starts growth will slow going into 2017: CMHC

By Staff | May 30, 2016 | Last updated on May 30, 2016
2 min read

During Q1 2016, the Canada Mortgage and Housing Corporation provided mortgage loan insurance for more than 83,000 units across the country, according to the organization’s first quarter financial results.

The CMHC also released supplemental data on the its mortgage loan insurance, securitization and covered bonds business activities—during the quarter, CMHC generated $313 million in net income from these activities.

When it comes to the economy, the CMHC’s earnings report says the corporation expects the growth of housing starts to slow through the rest of 2016 and in 2017. However, it also notes, “Real [GDP] is forecast to increase between 0.7% and 2.1% in 2016 and between 1.2% and 2.8% in 2017, compared to observed growth of 1.2% in 2015.”

Meanwhile, “The overall Canadian unemployment rate is forecast to be in the range of 6.9% to 7.6% in 2016 and within a range of 6.4% to 7.8% in 2017, compared to 6.9% in 2015.

Additional report highlights

  • Total insurance-in-force was $520 billion as at March 31, 2016, a $6 billion decrease from year-end 2015.
  • The average insured loan amount for transactional homeowner mortgages in the quarter was $242,367.
  • Homebuyers with CMHC-insured mortgages have an average credit score of 747 for transactional homeowner loans and an average gross debt service (GDS) ratio of 25.8% for the three-months ended March 31, 2016.
  • The overall arrears rate of CMHC’s portfolio is, as of March 31, 2016, standing at 0.34%. And nationally, CMHC’s arrears rate has remained relatively stable, although there has been a small increase in arrears in Alberta and Saskatchewan.
  • New securities guaranteed for the first quarter were $21.8 billion, comprised of $12.6 billion for market NHA MBS and $9.2 billion for CMB. CMHC’s total guarantees-in-force were $429 billion as at the end of the first quarter 2016.

Subsequent to quarter’s end, Fort McMurray was affected by wildfires. CMHC says it has provided lenders with options to support CMHC-insured homeowners touched by these unfortunate events. But, says CMHC, claim losses aren’t expected to be significant.

For more on housing, read:

Millennials want to buy homes but haven’t started saving

China is buying Canada: Inside the real estate frenzy

House hunters fear being priced out of market: survey

Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.