On July 1, Canada Mortgage and Housing Corporation (CMHC) tightened its underwriting policies for high ratio borrowers, including increasing credit score requirements and lowering debt servicing limits.
CMHC is, of course, a Crown Corporation, but there are private mortgage insurers, Canada Guaranty and Genworth Canada, that did not follow CMHC’s lead.
The result is CMHC has lost market share to the private companies as lenders send more business their way.
Last week, Evan Siddall, outgoing CEO of CMHC (he leaves at the end of the year) called on lenders to tighten their underwriting policies, for “the sake of the economy.”
Siddall sent a letter to CMHC-approved lenders and the country’s other two mortgage insurers, which reads, in part, “There is no doubt that we have willingly chosen to forego some profitable business that our competitors would find appealing.
“(CMHC) is approaching a level of minimum market share required to be able to protect the market in times of crisis.
“Please put our country’s long-term outlook ahead of short-term profitability.”
Industry executives were quick to respond, particularly to Siddall referring to a “dark economic underbelly to this business that I do not want to expose.”
“I think the type of language that is used in this letter is really only serving to drive fear in some instances,” Paul Taylor, president and CEO of Mortgage Professionals Canada, told BNN Bloomberg. “We should be thinking about the long-term economic prospects of Canadians here.”
, also told BNN insurers and lenders are “extremely conservative” in their underwriting practices.
“Nobody wants to take a house back,” said McLister. “No lender or insurer wants to lend such that their arrears rate is noticeably above average, because then they stick out and bad things happen. The cost of capital goes up (and) regulators clamp down. There are so many incentives that people don’t understand in this business to keep lenders doing the right thing.”
Phil Soper, president and CEO of Royal LePage, has his own take.
“It was one of the more bizarre things I’ve heard a senior executive or the head of a Crown Corporation ever say,” says Soper. “Metaphors pop into my head. First of all I thought of the CBC. Say the CBC decides it’s going to cut programs, which essentially is what CMHC did — they cut service levels to a significant part of the market, that being young people, first-time home buyers without a credit history. So when CBC cuts programming, CTV bumps up its programming and advertisers move their business over to CTV. Then, CBC writes a letter to advertisers and says ‘you know, there is a dark underbelly in Canadian broadcasting and really, for the good of the nation, you need to move your advertising business back to us.
“That’s basically what Siddall wrote, but, he didn’t (mention) CMHC’s drop in service levels, the fact they abandoned bank customers, that they’re going to make things better in the future.
“No, they use some bizarre language to try to convince banks randomly that they need to move this business back from the private sector to the public sector after they materially dropped them. I know there’s a collective raising of eyebrows of bank executives saying ‘thanks for your bizarre letter but sorry, we’re busy, and we’re moving on with our lives.’ ”
Prudence guides the private insurers, who have no back-up to failure.
“If CMHC gets into financial trouble, the Canadian taxpayer bails them out. Not that that has happened, because Canadian housing has been strong for decades, but if CMHC has problems, that’s what happens,” says Soper. “If a private company gets into trouble, they go out of business or their shareholders abandon them. There is no bailout for private companies, so the underwriting rigour in the private sector is very, very good, because they don’t want to write bad policies.”
Another Soper metaphor.
“Take Canada Post, which delivers mail to Coronach, Saskatchewan, or Balzac, Alberta, for the same price as they do between Calgary and Edmonton and it’s a public service,” he says. “CMHC, in this bizarre approach to the market, said ‘we want to write the low-risk, high-margin business and get out of the service-to-Canadian-homeowners business,’ which is why the agency was created in the first place, and they got surprised, because the private sector said, ‘no that can be done safely and profitably’ and the banks, in return, gave the private insurers the higher-risk business that CMHC walked away from and more of the regular lower-risk, higher-margin business as well.”
CMHC wants the lower-risk, higher-margin business back because, without it, it is in a tenuous situation.
“What they did backfired completely and they are in the process of losing material market share and they’ve got a bunch of staff and they’ve got all these premises and all this management,” says Soper. “Suddenly their budgets, their forecasts, their commitments to their owners, the federal government, they’re all thrown out the window because they’re losing market share. So, it’s a very, very bizarre situation and my guess is the new head of CMHC will turn things around and it will become more client-centric and more focused on high-service levels, rather than preaching these bizarre, anti-housing sentiments from Canada’s housing agency.”
One last thought from Soper.
“Siddall’s a strange guy and CMHC is suffering as a result of it.”
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
