CMHC doomsday housing forcast

Frank O’Brien
Western Investor

Canada Mortgage and Housing Corp. (CMHC) released a doomsday-style housing forecast May 27 that envisioned a nightmare collapse of the housing market with national sales dropping up to 29 per cent, starts plunging by from 50 per cent to 70 per cent and average house prices dropping as much as 18 per cent with no real recovery until 2022.

“Canada will see a historic recession in 2020 with significant falls in indicators of the housing market,” stated the Housing Market Outlook special edition spring 2020.

Bob Dugan, CEO of CMHC was quick to add the disclaimer that , “this housing outlook is subject to unprecedented uncertainty due to the pandemic” during a conference call with media.

The report states that Western Canada will be hit particularly hard, due to the Prairie provinces’ reliance on the resource industry and British Columbia’s exposure to the tourism and hospitality sector, which have been hammered by the global COVID-19 pandemic.

But CMHC’s uncertainty about its forecast is well placed, according to residential industry experts, who say there are early, positive signals that the current downturn could be brief, if brutal.

“We are already seeing inquires from home buyers up 5 per cent from pre-COVID levels,” said Elton Ash, Western Canada executive vice-president for Re/Max. Ash noted that the high level of housing sales at the start of this year is an indication of coiled demand that will lead to a quicker recovery than most expect. Ash is particularly bullish on Metro Vancouver, noting benchmark home prices increased in April and May, compared to a year earlier, even as sales crashed in the face of the pandemic. 

“To see the price drop that CMHC is suggesting is unrealistic,” Ash said. He sees downward price adjustments in B.C. of perhaps 5 per cent to 10 per cent, depending on the region.

“Yes, there has been some economic pain, but not to the extent that CMHC is suggesting,” he said.

Ash added that realtors and consumers have widely embraced the latest technology for virtual home tours, listings and communication, which has allowed many home transactions to proceed.

Brendon Ogmundson, chief economist of the BC Real Estate Association, is also confident that the “resiliency” of home buyers will lead to recovery later this year, following the plunge in housing sales with the arrival of COVID-19.

“We should be happy sales only fell by 50 per cent when you consider this is a global pandemic,” he said. Ogmundson said home prices in B.C. will remain fairly stable because the number of homes for sale has declined nearly 25 per cent because of social distancing. In April, he added, the benchmark provincial home price was 7.8 per cent higher than in April of 2019.

BCREA expects a sales recovery to begin in the second quarter, fed by “super low mortgage rates and pent-up demand,” Ogmundson said,

Ogmundson also noted that the majority of lost jobs are in the lower-end of income levels. “This will have more of an impact on the rental housing market rather than those buying homes,” he suggested.

Copyright © Western Investor

Should homeowners sell when there is a separation during the pandemic?

Nathalie Boutet
REM

COVID-19 has impacted all sectors of the economy, including real estate. The uncertainty is particularly challenging for homeowners who are at a crossroad in their relationship or in the process of separating.

The heightened tension created by the pandemic can fuel anger and conflict, leaving children especially vulnerable. If it becomes too tense in the residence and someone needs to leave, the process has become a little more challenging than before, but there are still viable options.

Should homeowners sell when there is a separation during the pandemic?

At the time of writing, real estate remains a sellers’ market with little supply. It may be more difficult for families in need of alternative living arrangements to allow for a physical separation.

It is also challenging for couples to get an accurate value of their property because the markets are in such flux. Compounding this is the difficulty for a spouse to qualify for a mortgage if their income has been affected by a layoff or a termination as a result of the coronavirus. With such an overwhelming scenario and an uncertain economy, now may not be the best time to make important decisions such as selling the family home.

It may make more sense to access short-term rental accommodation during the pandemic while the legalities of the separation are sorted. The protocols for finding a rental property have changed to accommodate physical distancing, with virtual showings, and only people with serious offers may be able to attend in person to see the place before finalizing the offer to lease.

Consider the best interest of children

Couples struggle to know if it is in their children’s best interest to stay together under the same roof, even if there is a lot of acrimony, or if it’s better to live physically apart.

While it’s likely harmful to the children’s well-being if the family stays together under tense or acrimonious circumstances, there may also be harm to the children if a parent leaves without a formal parenting plan in place. Struggling parents should look for counsellors, lawyers, mediators and financial planners who now offer their services by phone or videoconference, to get quick, professional guidance toward the solutions that work best for the family’s circumstances.

Who pays what?

Money is often the biggest source of conflict, and this could get worse if someone’s livelihood was affected by the pandemic. They struggle to find a fair way to pay the household expenses and the children’s expenses after the decision to separate has been made – even if they continue to live under the same roof.

While there is no one-size-fits-all solution, there are many ways to deal with expenses. It depends on a number of factors, including who has financial resources. It may make sense to continue the same arrangements that were in place before the decision to separate until professionals can guide the family towards different arrangements.

In some cases, couples put an agreed amount of money in a joint account and use that to pay family expenses until there is a more long-term arrangement in place. Sometimes, separating spouses may even be able to structure their payments in a way that maximizes tax savings. It should be noted that if a couple decides to live in two separate residences during separation, these expenses are shared equally.

Family laws are fairly complex when it comes to finances and money, and it is recommended to speak to a family law lawyer or mediator about these types of questions.

Legal ways to separate

Among the various legal approaches, there are two very good options for separating families, and they are collaborative negotiations and mediation. These two systems are encouraged as the first choice under Ontario’s revised Family Law Act, to help families reach agreements out of court with the aim of preserving some kind of relationship after the legal process is complete. The cost also tends to be less than going to court.

Professionals that work in these two systems have received special negotiation and communication training, using specific techniques that are very beneficial to helping their clients and families.

Especially with courts closed during the pandemic, and only urgent matters being heard, collaborative negotiation and mediation offer fantastic avenues for couples to quickly access help and find solutions that are best for their family’s needs.

© 1989-2020 REM Real Estate Magazine

A 10 percent minimum down payment would have a chilling effect on business

Ephraim Vecina
Mortgage Broker News

Canadian Mortgage and Housing Corporation CEO Evan Siddall’s recent address to the Standing Committee on Finance contained a plethora of negative projections, from housing prices falling by 18 percent to one-fifth of all Canadian mortgages being in arrears by September. But it was his comments around the advantages of making 10 percent down payments and CMHC’s attempts to limit demand that have the industry wondering if an increase in the minimum down payment requirement may be in the cards.

As Siddall made his case for the approaching “deferral cliff”, a scenario where unemployed homeowners who have deferred their mortgage payments are asked to start making them again despite not returning to work, he shared with parliamentarians two key pieces of data that associate five percent down payments with increased risk.

The first, a chart that tracks the percentage of loans in deferral by their loan-to-value ratios, showed that 69 percent of the mortgages currently in deferral fall into the 90-95 percent LTV category. The implication seems to be that if there were fewer borrowers putting down five percent, the deferral cliff Siddall described might be less towering.

Siddall singled out first-timers again when he discussed the potential losses they could face if housing prices fall by 10 percent.

“Unless we act, a first-time homebuyer purchasing a $300,000 home with a 5 per cent down payment stands to lose over $45,000 on their $15,000 investment if prices fall by 10 per cent,” Siddall’s statement read. “In comparison, a 10 per cent down payment offers more of a cushion against possible losses.”

Because CMHC will be on the hook for any insurance claims triggered by failing mortgages, Siddall also said the Corporation is evaluating its underwriting policies.

“So if housing affordability is our aim, as surely it must be, then there must be a limit to the demand we help to create, especially when supply isn’t keeping up,” he said.

That’s the same logic that gave Canada its mortgage stress test. Many brokers are worried that a 10 percent minimum down payment would have a similarly chilling effect on business.

“I think it would be a comparison you could draw a lot of parallels to,” says Anthony Venuto of Centum Intouch Mortgage Solutions.

As with the stress test, Venuto feels that any desire for a doubling of the down payment requirement will be driven by the risk associated with lending in Canada’s most expensive markets – Toronto, Vancouver, Montreal, etc. – even though most, if not all, properties in those cities sell for over $500,000, making them ineligible for five percent down payments. It will be the smaller, softer, far more numerous markets where consumers will see their spending power evaporate.

“What about the rest of Canada?” he wonders.

Impact on brokers
Chris Kolinski operates for iSask Mortgage Brokers in Saskatoon. The Bridge City’s real estate market has been soft as warm cheese for the past five years. With homes there appreciating so slowly, buyers often opt for putting five percent down.

“I’d say about 80 percent of the purchases I do are five percent down purchases,” Kolinski says. “It actually comprises a big chunk of the business I do.”

Kolinski is in regular contact with brokers in Alberta and Manitoba. He says minimum down payment deals are a common occurrence.

“If this was to happen, I anticipate a big hit to homebuyers in the prairie provinces for sure,” he says.

John Vo of Spicer Vo Mortgage in Halifax, another market where buyers are regularly able to purchase homes will five percent down, understands the desire of insurers and lenders to protect their assets by requiring higher down payments. But it’s an odd move for institutions that require a high volume of home purchases to keep the wheels spinning and the margins as high as possible.

“They’ll have more quality mortgage holders,” Vo says, but far fewer overall.

With down payments being one of the biggest challenges facing homebuyers, Vo says brokers will be expected to work much harder for their clients if the down payment requirement doubles. It will require a delicate balance: Brokers will have to set hard savings guidelines for their clients if they hope to qualify, but buyers frustrated by their situations may decide to switch brokers if they’re constantly being told something they don’t want to hear.

“We’re going to have to become even more firm with our customers in saying, ‘This is your plan. You really need to stick to it,’” he says.

For Kolinski, an increase in the required down payment is a challenge he’s ready for.

“I’ll adjust the same way I did when they introduced the stress test back in 2016,” he says. “It was a huge panic for me when it happened. But ultimately, it comes down to us as brokers being able to adapt to the market.”

Few in the industry seem to think the change is imminent. Either way, the discussion around down payment levels has shone a harsh light on the anxiety-ridden situation facing first-time buyers.

“We’re hearing more and more that home ownership isn’t a right, it’s a privilege,” says Verico COO Mark Squire. “You feel for those first-time buyers. You’re going to see more pressure on the bank of mom and dad to help out.”

Copyright © 2020 Key Media

Quick recover expected post pademic

Ephraim Vecina
Mortgage Broker News

Despite multiple headwinds and the continuous ravages of COVID-19, Canadian market activity and purchasing power will be able to recover quickly after the outbreak eases, according to outgoing Bank of Canada Governor Stephen Poloz.

“We have to be able to manage the risks around those things, so I’m not going to dismiss [the worst scenarios],” Poloz told BNN Bloomberg. “But, me personally, I do think on balance what I’m hearing, the flow that I’m hearing, is a little too dire, a little bit overblown.”

In the greater scheme of things, the coronavirus will not be a fatal roadblock, Poloz said. While the national economy is still on track to decline at least 15% this year, “you should see a very rapid return to production” once the economy restarts in late 2020, he said. “I’m relatively optimistic, what I find, compared with what the talk is.”

These predictions dovetailed with other observers’ forecasts of speedy post-pandemic recovery across the board, pointing at the Canadian financial system’s robust fundamentals.

However, the pace of this recovery will depend on homeowners not selling their assets, according to TD Economics.

“Absolutely key to our forecasts is the assumption that listings mirror sales by dropping substantially in the near term and recovering gradually thereafter,” said TD economist Rishi Sondhi. “This puts a floor on prices and sustains relatively tight supply-demand balances across most markets, allowing for the resumption of positive price growth as provincial economies are re-opened.”

Copyright © 2020 Key Media

Metro real estate in for a wake-up call

Douglas Todd
The Vancouver Sun

More condominiums and houses are under construction in Metro Vancouver than ever before.

But who is going to buy them — let alone live in them — in an era mutated by COVID-19? Who will come forward when a global lockdown has pummelled the three key factors that fuel housing demand in Canada?

A record-breaking 44,000 “homes” are being built across Metro Vancouver. Almost 37,000 are condominiums or apartments. Planned years in advance to serve a once-fiery market, their construction has not been stopped by lockdown measures.

Judging by the trend of the last decade, developers of new Metro properties would expect about four in 10 of their dwellings to be snapped up by people who don’t actually live in them — so-called investor-owners, who leave the “homes” vacant or rent them out. (The real-estate market is similarly vulnerable in Toronto, where a record 73,000 units are under construction.)

But who are these houses and condominiums to be sold to at a time when the pandemic is causing double-digit unemployment, has pushed household debt and default into uncharted territory and thrown nerve-wracking unpredictability into population-growth forecasts based mostly on offshore in-migration?

A record 44,000 housing units are being built in Metro Vancouver, plus another 73,000 in Greater Toronto. Source: CMHC / Steve Saretsky

Metro Vancouver and Toronto are not alone, especially among desirable cities, in seeing their real-estate foundations cracked by the novel coronavirus, which has already caused the volume of sales to plummet.

Prices are set to be next. Various analysts have forecast housing values in Great Britain, Australia and the United States to drop by 10 to 20 per cent over the next year or two.

Predictions about the future of Canada’s housing prices are all over the proverbial map, to an almost comical degree (although few are laughing). Stephen Punwasi, of Better Dwelling, has compiled the wildly diverging Canadian housing forecasts of a dozen big-time analysts.

They range from TD Canada Trust and Scotiabank over-optimistically prophesying, at least for public consumption, that prices will rise six to 12 per cent over the next two years. That contrasts with credit agencies such as Moody’s and DBRS Morningstar more quietly predicting they will drop 10 to 30 per cent. The Canada Mortgage and Housing Corporation (CHMC), for its part, is looking at declines of nine to 18 per cent.

Meanwhile, the Canadian Real Estate Association has simply decided to not make its usual quarterly prediction. That leaves Punwasi musing: “CREA’s mom must have told them if they can’t say anything nice, don’t say anything at all.”

Right now, in the havoc-filled short term, it’s prudent to take the forecasts of self-interested mortgage-holding banks far less seriously than the more impartial credit and housing agencies. Their predicted price drops could hurt over-leveraged owner-investors, but end up being good news for working people who have withstood COVID-19 and might be able to buy a first home or move into something better suited to their needs.

It’s grim out there, though. Virtually no one is blind to the first COVID-19 factor set to hammer prices: That it has cost more than three million Canadians their jobs, at least temporarily. The second crisis, of growing household debt, is also clear: CMHC president Evan Siddall said this week that 20 per cent of Canadian mortgages could go into arrears.

When it comes to the third COVID-19 factor threatening housing sales, only a few industry specialists talk about how migration patterns, which are changing dramatically because of the pandemic, will hit housing demand across Canada and especially Toronto and Metro Vancouver (the latter with a population of 2.6 million).

More than four out of five people who have moved into Metro Vancouver (and Toronto) in recent years are foreign-born. Many are immigrants, but an unusually large portion — 35 per cent — are non-permanent residents, such as international students, guest workers and refugees, says B.C. housing analyst Steve Saretsky.

Not only have COVID-19 precautions virtually shut Canada’s borders to newcomers, they’ve led to many of the more than one million international students and guest workers in Canada (about 180,000 in Metro Vancouver) returning to their homelands. That’s hitting housing, especially the rental markets of Vancouver and Toronto, which have the highest immigration rates per capita in North America.

No province in Canada relies more than B.C. on in-migration to expand its population, which creates more demand for housing. Citing data from Capital Economics, Saretsky wrote in his April report: “In B.C. we are particularly vulnerable to a reduction of migration flows. Net immigration was 14 times as large as the net natural increase (ie. net births less deaths) — versus fives times for Canada as a whole.” (See chart.)

One politician paying attention to these many ways COVID-19 is affecting the region’s mammoth housing industry is Vancouver city councillor Colleen Hardwick.

The daughter of the late University of B.C. geographer Walter Hardwick (who also served on Vancouver council) has a motion asking why the city has a housing strategy focused on building far more units that it actually needs.

Hardwick’s motion — set to be debated next week, with supportive presentations by several B.C. housing scholars — says that in light of “post-pandemic realities,” City of Vancouver politicians and staff should be re-examining why it is targeting to build 72,000 new dwellings over the next decade.

The city of Vancouver, population 680,000, has been growing by one per cent a year mainly because of offshore migration, says Hardwick’s motion. At that growth rate, the city really needs only 30,000 new housing units over the next 10 years.

And given that “there’s no question COVID-19 is going to have a major impact on housing” and migration flows, Hardwick said in an interview she wonders why so many officials have been creating a “scarcity narrative” to justify increased zoning densities and intense surges in housing supply.

In order to plan housing effectively, Hardwick is urging city staff to provide better data and a more credible construction target, one that will meet the needs of ordinary people who live and work in the region, not necessarily serve luxury buyers, many of whom spend foreign-sourced capital.

Along with some other savvy municipal politicians in Metro Vancouver’s suburbs, Hardwick is aiming for a more healthy way forward in a region where many developers have for years been erecting dwellings largely to satisfy the desires of owner-investors and speculators.

© 2020 Vancouver Sun

BoC to reduce the qualifying rate ten basis points

Clayton Jarvis
Mortgage Broker News

The Bank of Canada is set to reduce its qualifying rate ten basis points, from 5.04 to 4.94 percent, sources tell Mortgage Broker News. After the decrease, which is expected to be announced by Monday, the five-year fixed mortgage rate will have inched another step closer to a level not seen since 2016, when it was reduced to 4.64 percent.

It’s a small change to be sure, but in the current environment, says BMO chief economist Doug Porter, every bit helps.

“Any change can make a difference at the margin, even if tiny,” he says. “I believe the much bigger issue for the housing market will be the broader economic outlook and the extent to which activity and jobs can recover as the re-opening progresses. Rates still matter, but much less so than in the recent past.”

John Vo of Spicer Vo Mortgage doesn’t expect the decrease to work wonders for his clients, but he applauds the Bank of Canada for the move all the same.

“Is it going to make a huge difference in affordability?” Vo asks. “No. But it’s encouraging to see that the Bank of Canada is cautiously looking at ways of helping people qualify.”

Centum Intouch Mortgage Solutions broker Anthony Venuto sees the lower qualifying rate as being primarily helpful to borrowers are on the verge of receiving funding who still need a slight boost.

“It’s not like a person was going to qualify for $500,000 and all of a sudden they can qualify for $550,000,” he says.

But the extra few thousand dollars the lower qualifying rate may provide could be a game-changer for first-time buyers, especially at a time when so many of them are struggling to set enough capital aside for down payments and closing costs.

Venuto thinks the lower rate may have one more benefit.

 “With those posted rates changing on the five-year fixed, that’s going to help Canadians if they potentially have to break their mortgages with their institutions, because [the competing rates] might be lower,” he says.

Copyright © 2020 Key Media

BoC analysis makes Canadian household debt most vulnerable

Ephraim Vecina
Mortgage Broker News

Over the last few decades, household debt growth accelerated faster than every other debt class, according to real estate information portal Better Dwelling.

Citing data from the Bank of Canada, the analysis said that the trend “makes Canadian households [among] the most vulnerable” globally.

“In 2000, household debt was just 58% of GDP. By the end of 2019 Q4, that number has hit 100% of GDP,” Better Dwelling said. “This is amongst the highest of advanced economies.”

BoC numbers indicated that national household debt hit a peak of $2.28 trillion in March, increasing by 0.44% from February and 4.6% from March 2019. Outstanding mortgages accounted for $1.64 trillion of this sum, rising by 0.49% monthly and 5.3% annually.

The impact on monthly budgets was inevitable: Even before the COVID-19 pandemic took hold, Canada’s insolvency incidence was already at 11,575 filings as of February, which was the highest level since 2010.

The Office of the Superintendent of Bankruptcy Canada said that this volume was 9% higher on an annual basis. Ontario posted the greatest increase during that month, at 3,837 filings (up 16.8% year over year), with Quebec’s 3,770 filings (up 1.9% annually) coming in at a close second.

“[These figures] underscore how vulnerable Canadian households are to income interruption. Over the next few months we’ll likely see an unfolding of two crises: the global pandemic and the bursting of the Canadian consumer debt bubble,” MNP LTD president Grant Bazian said. “Many households were already limited in their ability to face any kind of financial disruption. Now, all Canadians are feeling the effects on their paycheques, pocketbooks and stock portfolios. Those who were already saddled with a lot of debt are in economic survival mode.”

Copyright © 2020 Key Media

Housing may decrease due to reduced immigration

Ephraim Vecina
Mortgage Broker News

Flagging immigration numbers along with much-reduced purchasing power will pull down market activity for the rest of the year, according to the latest Teranet-National Bank of Canada House Price Index.

The steep climb in national unemployment numbers – from February’s 5.6% to 13% in April – will also have a significant influence in housing sales and values.

“In this context, demand for housing may decrease due to a reduction in immigration and would-be first-time homebuyers not being able to qualify for a mortgage loan,” Teranet said. “At the opposite, supply may be fuelled by homeowners unable to meet mortgage payments and for that reason will look to sell their home. In other words, a lasting high unemployment rate could mean downward pressure on house prices.”

The composite index in April was 5.3% higher than the same time last year. Ottawa-Gatineau (13.2% higher) imparted the most upward movement, along with Montreal (9.5%), Halifax (9.5%), Hamilton (8.9%), and Toronto (8.2%).

With the COVID-19 pandemic continuously savaging global markets, Canada Mortgage and Housing Corporation (CMHC) said that the pace of recovery will be markedly slow, with pre-recession prices returning only after three years.

“For Canada and for Ontario, I think, the best case we’re looking at … house prices getting back to their pre-recession levels, at the earliest, by the end of 2022,” CMHC Chief Economist Bob Dugan said.

Copyright © 2020 Key Media

One in five mortgages could be in arrears by September

Clayton Jarvis
Mortgage Broker News

In comments delivered to the Standing Committee on Finance on Tuesday, Canadian Mortgage and Housing Corporation CEO Evan Siddall laid out a potentially bleak scenario for the country’s homeowners. Siddall told parliamentarians that by September, if Canada’s economic recovery fails to generate enough momentum, 20 percent of mortgages could be in arrears.

“A team is at work within CMHC to help manage a growing debt ‘deferral cliff’ that looms in the fall, when some unemployed people will need to start paying their mortgages again,” Siddall said during the Committee’s videoconference. “As much as one fifth of all mortgages could be in arrears if our economy has not recovered sufficiently.”

It was one of many disturbing claims made by Siddall, who also told the Committee that the nominal house price in Canada could fall by as much as 18 percent over the next six to 12 months, with the biggest losses expected in oil-driven economies like Alberta and Saskatchewan and in overheated markets like Toronto. If prices fall by 10 percent, Siddall said first-time buyers could lose as much as $45,000 on a $300,000 home.

But the deferral issue didn’t seem to phase him.

“Canadians do a very good job of paying their mortgages, even when they’re under water, so our loss forecasts are not extreme,” he said in an exchange with Progressive Conservative MP Pierre Poilievre. When asked by Poilievre for CMHC’s potential loss forecast, Siddall estimated that it could be as high as $9 billion.

According to DLC’s Dr. Sherry Cooper, Siddall’s claim that 20 percent of mortgages could be delinquent by September borders on the ridiculous.

“It’s kind of bizarre to me,” she says. “Most economists are finding fault with it.”

An arrears rate of 20 percent would essentially mean that the Bank of Canada’s efforts to ensure the availability of credit and the federal government’s pumping of billions of dollars into the economy to prevent business closures and forced bankruptcies will actually accelerate the rate at which Canadian mortgages are turning sour.

“The Bank of Canada estimates that the delinquency rate could possibly move up from .25 percent to .8 percent. And now we’re talking about 20 percent delinquency rates?” Cooper says. “Give me a break.”

When asked if there was a possibility that Siddall was referring to deferrals when he used the word “arrears”, Cooper was doubtful.

“No, he’s a very smart guy,” she says, despite the unlikelihood of his prediction.

“It’s not going to happen. The highest delinquency – which is what ‘arrears’ is – rates we’ve ever seen in history are nowhere near [the projected 20 percent],” she says.

Centum FairTrust owner Jimmy Hansra agrees with Cooper’s assessment.

“The government has been pretty proactive in terms of providing as many programs as they possibly can to weather the storm,” he says, adding that there’s “no way” Siddall’s arrears projection is accurate.

“Even his comments about CMHC seeing housing prices falling by 18 percent I think are overblown, too,” says Hansra. “Nobody knows what’s happening with house prices.”

Hansra isn’t preparing for the kind of worst-case scenario Siddall laid out. Instead, he says his team is readying themselves for a potential, although still unlikely, stream of borrowers looking for refinancing or equity take-out solutions that will require private money.

“I don’t see it happening,” he says, “But if it does, I think that’s the only way mortgage professionals are going to be able to provide financing for their customers. Because if they’re not going to be able to make their mortgage payments and they have equity sitting in their home, either people are going to look to use home equity lines of credit to make those payments or they’ll look for some sort of second or third mortgage financing.”

Hansra stresses that projections like Siddall’s, particularly when they’re made at a time with no parallel in human history, need to be taken with a few million grains of salt.

“It’s all a guess,” he says.

If CMHC did envision a 20 percent arrears rate by fall, a fair question to ask, says RateSpy founder Robert McLister, is why they are not acting now to mitigate what would be an utter catastrophe for the Canadian economy.

“I think that if the government really thought there was going to be 20 percent arrears, they would take action,” McLister says. “You can’t have one in five homeowners not paying their mortgage, with a large percentage of those leading to liquidation. You know what that would do to home prices. You know what that would do to the economy. It’s not going to happen.”

Copyright © 2020 Key Media