CMHC: 2016 Q2 Housing Finance Data Update

OTTAWA — The 2016 Q2 housing finance data includes the latest on mortgage credit, bonds, securitization, arrears and more. CMHC highlighted a few noteworthy insights found in the numbers:

Overall Mortgage Performance Steady
Residential mortgage credit continues to expand in the second quarter, growing 1.7% from the previous quarter to $1.4T. After picking up pace in the second half of 2015, mortgage credit growth has remained stable in recent quarters.
The overall residential mortgage arrears rate1 held steady at 0.28% for the first five months of 2016. Performance varied across regions however, ranging from 0.14% in Ontario to 0.63% in the Atlantic Provinces. In Alberta, where the economy continues to grapple with the drop in crude oil prices, the average mortgage arrears rate was 0.36% for the second quarter2, compared to 0.27% at the same time last year.

Canadian Lenders Continue to Explore a Variety of Funding Sources
In the private mortgage funding market, another $13.2B of covered bonds were issued in the second quarter of 2016, bringing the total value of covered bonds outstanding to $137.1B. In recent quarters, given favourable investor appetite, lenders have placed several longer-term issues (up to twenty-year) to take advantage of the current low funding cost environment. Additionally, TD tapped into the domestic funding market with the issuance of its first Canadian dollar-denominated covered bond in June.
The private mortgage securitization market in Canada remains small with $19.2B in mortgage-backed ABS and ABCP outstanding as of 2016Q23. Several new residential mortgage transactions were added in the second quarter, ahead of the July implementation date for new federal rules prohibiting the use of insured mortgages as collateral in non-CMHC sponsored securitization vehicles. Consequently, mortgage assets as a share of total Canadian private securitization increased 2.1 percentage points from the previous quarter to 28.7%.