Even though real estate markets have been on fire in many Canadian cities this summer, the head of the Canada Mortgage and Housing Corporation (CMHC) says all may not be well in the market.
In a recent tweet, the federal housing agency’s president and CEO Evan Siddall stated that around 14 per cent of Canadian mortgages remain in deferral.
“Not all will go into arrears and not all of that subset will result in foreclosure,” he declared.
Then he added that other factors – such as home prices, demand, supply, rates of unemployment, and government supports – will play a role in the ultimate results, which he described as “unknowable.”
We believe ~14% of mortgages are still in deferral. Not all will go into arrears and not all of that subset will result in foreclosure. The ultimate results are unknowable as they are a functions of house price levels, demand, supply, rates< unemployment, govt supports, etc. https://t.co/wKrG9g10S6
— Evan Siddall (@ewsiddall) August 21, 2020
In May, Siddall tweeted that 12 per cent of Canadian mortgages were in deferral, but suggested that this could rise to 20 per cent by September.
In the past, CMHC has predicted that home prices across the country will fall from 9 to 18 per cent over the next year as a result of the pandemic.
12% of mortgages are in deferral; that could be 20% by Sept. Deferred mortgages are not in arrears since they are deferred with lender ok. That 20% is *at risk* of being in arrears 90 days after a required payment is missed.
— Evan Siddall (@ewsiddall) May 23, 2020
This story originally appeared in the Georgia Straight.
