Canada Mortgage and Housing Corporation

I mean, these are serious numbers.

And CMHC looked at this more directly using a, a survey of financial security data from that same time set, the 1999 to 2019.

The findings are a little bit more nuanced.

Homeowners actually, you know, s- shocker, tended to be wealthier, but they also tend to have higher income, larger families, and more education.

It's never that simple.

But the scale of this issue, which I think it is an issue, is still huge.

CMHC says owners are about seven times wealthier than renters.

Homes represent about half of that homeowner net wealth, and renters only held about 6 to 10% of all the net wealth in Canada during that period of 2019...

I'm your guest host, Mireille Therriault.

To help answer these questions, Aled ab Iorwerth, one of CMHC's deputy chief economists, will walk us through our latest housing supply report.

Welcome, Aled.

Thank you.

Let's break this down into exactly where we're at.

Like what should a Canadian do about this? As of February, according to CMHC, 42% of new mortgages in Canada at charter banks were variable rate mortgages.

And if you can remember, a lot of people were going that way because of where things are going.

That is and was a very popular decision.

Remind us what purpose-built rentals look like right now and what the vacancy rate is?

Well, the vacancy rate, so purpose-built rentals, which is the stock that's tracked by CMHC, so it's not condo rental, just to help for your listeners that are not familiar with the terms, not the condo rental, but in the actual apartments that were built for the purpose of being rental housing in perpetuity.

Vacancy rates, the last CMHC survey, I believe, was somewhere over 4%.

We won't see another survey until later this fall, and it's only done once a year.

In the Yardi data, and this is another source of data that I have access to, it looks like they've edged down a little bit.

Who is going to pay $4.9 million? Nobody.

But that's what CMHC or the bank is going to use as the appraisal.

And that's what they're going to base their financing on.

So they get all their money out.

Because the mortgage insurance protects the bank in a ton of cases.

That CMHC, if the borrower were to default or whatever, the bank gets the money and then CMHC, I believe, sues the buyer and tries to get the rest of the money.

And then on the other side of things, a lot of their borrowers have equity in the home.

So if the house does need to be sold, if they can't pay, CIBC more than likely recouping the money.

I think you're seeing a lot of them go private for this reason because they don't have the cash to survive these builds.

And then I think a lot more of that's going to come out in the next probably two quarters as more and more of the public companies have to be like, oh, our vacancy is climbing and it's not whatever CMHC has opposed it at 2.7% or whatever.

Yeah.

All right, this one I think is very relevant to our work and our partners.

The machine, the modern machine that we know and would recognize a little bit gets kind of created.

CMHC is established in 1946.

Then 1954, the government mortgage loan insurance happens, plus banks start to be- MLI, baby.

Let's go.

So they, they, you know, they just like Nick reach with their hand for the gas pedal in the form of the, of the, uh, 2019 first-time homebuyer incentive, which this one was kind of dumb.

I don't know.

I haven't heard of a single deal like this happening, but they tried, right? So they came up with this idea of shared equity, where CMHC takes a piece of your house in exchange for part of your down payment.

I remember even talking about this stuff and I was like, this is kind of cool, but I didn't- We did