CMHC reports robust growth in multi-unit mortgage loan insurance

The Crown corporation has released latest financial results

CMHC reports robust growth in multi-unit mortgage loan insurance

In its just released report on its third-quarter results, Canada Mortgage and Housing Corporation (CMHC) reported strong growth in multi-unit mortgage loan insurance amid a drop in housing sales and prices.

The Crown corporation’s multi-unit insurance-in-force totalled $154 billion during Q3, markedly higher than the $136 billion seen during the end of December 2022.

This strength more than compensated for declines in transactional homeowner (down from $179 billion to $172 billion) and portfolio (down from $84 billion to $79 billion) insurance-in-force.

CMHC said that the federal government’s recent announcement of increasing the annual limit for Canada Mortgage Bonds (CMB) from $40 billion to up to $60 billion will pave the way for more low-cost financing for multi-unit rental construction.

“This new measure will help to build up to 30,000 more rental apartments per year, which may further increase the growth in our multi-unit volumes,” CMHC said. “An additional $5 billion of CMB is expected to be issued out of the $20 billion limit increase in the fourth quarter of 2023.”

In the quarter ending September, the total equity of Canada has increased by $73 million (1%) mainly due to CMHC’s comprehensive income of $1.008 billion in 2023. This was partially offset by $935 million in dividends declared and paid.

The Crown corporation saw a decrease in loans at amortized cost of $2.910 billion (1%) as maturities of CMB program loans exceeded new issuances, leading to a $4.761 billion (2%) decrease in loans.

Total liabilities fell by $2.420 billion (1%), primarily due to by lower borrowings at amortized cost of CMB.

“This is partially offset by increased borrowings from the government of Canada to fund NHS program loans, an increase in accrued interest payable of $565 million (69%) due to higher interest rates and timing,” CMHC said. This was also accompanied by an increase of $343 million (5%) in insurance contract liabilities, driven by new underwriting in 2023.