Q3 report reveals strides in addressing Canada's rental supply gap
The Canada Mortgage and Housing Corporation (CMHC) has reported growth in its multi-unit residential insurance activities in its latest quarterly financial update.
For the third quarter of 2024, CMHC insured nearly 65,000 multi-unit residential units, a 26% jump from the same period in 2023. Of these, almost 30,000 were newly constructed units, highlighting a surge in the construction of purpose-built rentals. So far in 2024, the agency has insured more than 206,000 units, up from roughly 156,000 during the same period last year.
The rise in insured volumes, which totalled $47.6 billion in the first three quarters of 2024 compared to $29.9 billion in 2023, was largely driven by CMHC’s MLI Select product. The program is designed to encourage the development of accessible, climate-friendly housing projects with longer amortizations and higher loan-to-value ratios.
“Facilitating the construction of purpose-built rentals remains a key factor in tackling the country’s housing supply and affordability challenges,” CMHC chief financial officer Michel Tremblay said in the report.
CMHC also highlighted the launch of the Co-Op Housing Development Program (CHDP) during the third quarter. The program will provide $1.5 billion in loans to fund thousands of affordable cooperative housing units. These loans will cover up to 100% of eligible residential project costs and 75% of non-residential costs, further cementing CMHC’s commitment to addressing Canada’s housing crisis.
The report noted a decline in transactional homeowner insurance volumes, attributed to high home prices and elevated interest rates. The agency insured just under 14,000 homeowner units in the third quarter, down from over 15,600 during the same period last year.
Additionally, CMHC touched on upcoming federal policy changes aimed at making homeownership more accessible. Starting December 15, 2024, the price cap for insured mortgages will increase from $1 million to $1.5 million.
At the same time, eligibility for 30-year amortizations will expand to include all first-time buyers and purchasers of new builds. Beginning in January 2025, insured homeowners will also be allowed to refinance their mortgages to fund the construction of secondary suites.
While the potential impact of these changes on transactional insurance volumes is uncertain, CMHC expressed optimism about their capacity to enhance affordability.
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The report noted that arrears for CMHC-insured mortgages remain exceptionally low at 0.30%, below historical averages, which has kept claims paid at minimal levels.
“We are pleased to see such consistent and increasing uptake in our multi-unit insurance products, which are an important factor in supporting the creation of rental supply in Canada,” Tremblay added.
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