CMHC Releases 2014 First Quarter Results

Canada Mortgage and Housing Corporation (CMHC) released today its results for the first quarter of 2014. Net income for the quarter was $406 million, up 7% year-over-year. Insurance-in-force at quarter-end was $555 billion, a reduction of $2 billion from the 4th quarter of 2013. The increase in net income is mainly attributable to higher earnings from investments and lower insurance claims expenses, both a result of improved economic conditions.

Total insured volumes ($) for the three months ended 31 March 2014 increased by 14 per cent compared to the same period in 2013. The increase in 2014 is the result of higher volumes of portfolio insurance and can be attributed to lenders changing the timing of their take-up of the portfolio insurance product in 2014. Insured volumes ($) for transactional homeowner insurance was approximately 2% lower in the first quarter of 2014 relative to the same period in 2013.

For transactional homeowner approved loans, the average credit score in the first quarter of 2014 was 743 while the average gross debt service (GDS) ratio was 26.2% during this same period. The high average credit score and average GDS ratio demonstrates a strong ability among homebuyers with CMHC-insured mortgages to manage their debts.

The strength of CMHC’s mortgage insurance portfolio is further demonstrated by the overall arrears rate of 0.35 per cent at March 31, 2014. Arrears rates have remained stable over the past several years.

To help readers better understand the business undertaken by CMHC, the Corporation is also publishing a supporting supplemental document containing a range of statistics and data on its mortgage insurance business. The supplement provides meaningful insight into CMHC’s mortgage insurance operations and will provide market participants with data that will allow them to better analyze our activities in the Canadian housing market.

Guarantees-in-Force

CMHC’s guarantees-in-force totalled $399.6 billion as at March 31, 2014, which is a $1.9 billion increase from the

4th quarter of 2013.

Assisted Housing

CMHC works closely with provinces, territories and housing providers, including First Nations, to help low-income Canadians access affordable, better quality housing off- and on-reserve. For the three months ended 31 March 2014, CMHC provided nearly $600 million for housing programs on behalf of the Government of Canada.

Economic Action Plan 2013 confirmed the Government of Canada’s continued commitment to working with provinces and territories to develop and implement solutions to housing by renewing the Investment in Affordable Housing (IAH) to March 2019. On 4 March 2014, the Governments of Canada and British Columbia announced the extension of the IAH agreement to March 2019, for a combined federal/provincial investment of more than $300 million.

Since then, on 25 April 2014, the Governments of Canada and Prince Edward Island announced the extension of the IAH agreement to March 2019, for a combined federal/provincial investment of some $15 million, on 28 April 2014, the Governments of Canada and New Brunswick announced the extension of the IAH agreement to March 2019, for a combined federal/provincial investment of $78 million and on 2 May 2014, the Governments of Canada and Alberta announced the extension of the IAH agreement to March 2019, for a combined federal/provincial investment of more than $200 million.

As Canada’s national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable housing solutions that will continue to create vibrant and healthy communities and cities across the country.

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