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CANADA MORTGAGE AND HOUSING CORPORATION
Robyn Adamache
Client Relations Manager
CMHC Multi-Unit Insurance, BC
CANADA MORTGAGE AND HOUSING CORPORATION
What is the Rental Construction Financing Initiative?
$2.5BIn low-cost loans to municipalities
and housing providers for the construction of affordable
rental housing in Canada
$1Mminimum
loan
4
Ye a r
initiative
CANADA MORTGAGE AND HOUSING CORPORATION
Eligible shelter and project types
Standard Apartments
Excludes retirement homes, single room occupancy, equity co-ops, hotels, social housing
and student housing
and age-restricted buildings!
CANADA MORTGAGE AND HOUSING CORPORATION
Financing Terms
Loan Term: 10-year fixed or hybrid (floating/fixed)GoC 10-year bond rate + 33-50 bps
Mortgage Insurance: No premiums
Aids in long term financing
Loan-to-Cost: Up to 100% (residential)
Up to 75% (commercial)
Ammortization: Up to 50 years
CANADA MORTGAGE AND HOUSING CORPORATION
Financing Terms
Payments: Interest only, construction – rent-upPrinciple and interest after stabilization
Holdback: No rental achievement holdback
Recourse: 100% recourse, construction – rent-upNon-recourse thereafter
Loan Advance: Within 6 months of commitment
CANADA MORTGAGE AND HOUSING CORPORATION
Minimum mandatory requirements
SOCIAL OUTCOME DRIVEN
Affordability Financial Viability
Energy Efficiency
Accessibility
1 2 3 4
CANADA MORTGAGE AND HOUSING CORPORATION
Multi-Unit Policy Enhancements for Affordable Housing
CANADA MORTGAGE AND HOUSING CORPORATION
Multi-Unit Value Proposition
8
Flexibility in Financing
Lower Interest Rates
Guaranteed Renewal
Borrowers can obtain mortgage financing
with a higher loan-to-value (LTV)
CMHC insured financing provides buyers access to
competitive interest rates
Facilitates guaranteed renewal for the life
of the mortgage
CANADA MORTGAGE AND HOUSING CORPORATION
Affordable housing flexibilities
9
Expanded definition
of affordability
Extended to
existing properties
Enhanced
underwriting
flexibilities
CANADA MORTGAGE AND HOUSING CORPORATION
Affordable project size and types eligible
Project size:
• Minimum 5 units (retirement homes 50 units/beds)
Applicable projects:
• Standard apartments• Retirement homes • Single room occupancy projects (SROs) • Supportive housing projects
10
CANADA MORTGAGE AND HOUSING CORPORATION
More information radamach@cmhc.ca 604-737-4161
Multi-Unit MLI for New and Existing Market and Affordable Housing
www.cmhc.ca/multi-unit
New Rental Construction Financing
www.financinginitiative.ca
financinginitiative@cmhc.ca
Multi-Unit MLI for New and Existing Market and Affordable Housing
CANADA MORTGAGE AND HOUSING CORPORATION
Kelowna CMAHousing Market OutlookSeptember 28, 2017
CANADA MORTGAGE AND HOUSING CORPORATION
Economic and Demographic Factors Affecting the Housing Market
CANADA MORTGAGE AND HOUSING CORPORATION
BC leads the country in employment growth again in 2017
3.9
0.9
0.0
1.5
1.5
2.4
0.6
0.6
3.3
-4.3
-8 -6 -4 -2 0 2 4 6 8
BC
Alberta
Saskatchewan
Manitoba
Ontario
Quebec
New Brunswick
Nova Scotia
Prince Edward Island
Newfoundland and Labrador
% Change YTD 2017 vs. YTD 2016
Job Growth by Province
Source: BC Stats
CANADA MORTGAGE AND HOUSING CORPORATION
Housing market key to employment gains in 2017
16.5
0.4
0.0
4.2
0.2
2.0
3.7
7.7
0.8
-3.1
4.0
-20 -15 -10 -5 0 5 10 15 20
Finance, insurance, real estate
Trade
Public Admin
Transportation and warehousing
Professional, scientific and technical
Healthcare
Services
Construction
Manufacturing
Forestry,Fishing,Mining, Oil and Gas
Goods
% Change YTD 2017 vs. YTD 2016
Source: BC Stats
BC Employment Growth by Industry
CANADA MORTGAGE AND HOUSING CORPORATION
Strong full-time employment growth in 2017
-15
-10
-5
0
5
10
15Full-time (x1000) Part-time (x1000)
FT vs. PT Jobs Gained/Lost over Time (seas. adj.) – Kelowna CMA
Source: Statistics Canada
CANADA MORTGAGE AND HOUSING CORPORATION
Goods producing sector bolstered by construction
-8
-6
-4
-2
0
2
4
6
8
2012M
01
2012M
04
2012M
07
2012M
10
2013M
01
2013M
04
2013M
07
2013M
10
2014M
01
2014M
04
2014M
07
2014M
10
2015M
01
2015M
04
2015M
07
2015M
10
2016M
01
2016M
04
2016M
07
2016M
10
2017M
01
2017M
04
2017M
07
Agriculture Construction Manu Other
Goods Producing Sector – Jobs Gained/Lost over Time – Kelowna CMA
Source: Statistics Canada
CANADA MORTGAGE AND HOUSING CORPORATION
Service sector sees broad employment growth
-15
-10
-5
0
5
10
15
20
2012M
01
2012M
04
2012M
07
2012M
10
2013M
01
2013M
04
2013M
07
2013M
10
2014M
01
2014M
04
2014M
07
2014M
10
2015M
01
2015M
04
2015M
07
2015M
10
2016M
01
2016M
04
2016M
07
2016M
10
2017M
01
2017M
04
2017M
07
FIRE Public Admin Services Trade
Service Producing Sector – Jobs Gained/Lost over Time – Kelowna CMA
Source: Statistics Canada
CANADA MORTGAGE AND HOUSING CORPORATION
• Tourism – Seasonally adjusted room revenues have been increasing steadily
• Kelowna International Airport – has been having back to back record breaking months in terms of passenger volumes in 2017 – this is a sign of increased economic activity in terms of tourism but also business travel
• UBCO and Okanagan College – both post-secondary institutions have been seeing rising enrolment rates. This is a positive result of population growth as well as demand for a diversity of skilled labour in the area.
Other positive economic indicators
CANADA MORTGAGE AND HOUSING CORPORATION
Net-migration at 15 year high in Kelowna
-1,000
0
1,000
2,000
3,000
4,000
5,000Natural International Interprovincial
Intraprovincial Total
Components of Population Growth – Kelowna CMA
Source: Statistics Canada, BC Stats
CANADA MORTGAGE AND HOUSING CORPORATION
Migration of seniors more prevalent relative to 2008
Source: Statistics Canada
Total Net-migration by Age Group – Kelowna CMA
0
200
400
600
800
1000
1200
1400
2008 2012 2016
CANADA MORTGAGE AND HOUSING CORPORATION
Great baby boomer wave in full swing
Projected Population Growth of Individuals 65 and Older – Kelowna CMA
Source: BC Stats - P.E.O.P.L.E Projections 2017
0
200
400
600
800
1000
1200
1400
1600
1800
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
2023
2026
2029
2032
2035
2038
2041
WE ARE HERE
CANADA MORTGAGE AND HOUSING CORPORATION
Growth in baby boomers will be offset by millenials and Gen X/Y
Projected Population Growth of Individuals Aged 20 to 44 – Kelowna CMA
Source: BC Stats - P.E.O.P.L.E Projections 2017
-1000
-500
0
500
1000
1500
2000
2500
3000
35001987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
2023
2026
2029
2032
2035
2038
2041
WE ARE HERE
CANADA MORTGAGE AND HOUSING CORPORATION
Stronger projected growth in seniors and young professionals
-2000
-1000
0
1000
2000
3000
4000
5000
6000
7000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
0-14 15-19 20-34 35-44 45-64 65+
Projected Growth in the Population by Age Cohort – Kelowna CMA
Source: BC Stats - P.E.O.P.L.E Projections 2017
CANADA MORTGAGE AND HOUSING CORPORATION
Mortgage rates anticipated to rise gradually
0
1
2
3
4
5
6
7
8
2008-0
1
2008-0
6
2008-1
1
2009-0
4
2009-0
9
2010-0
2
2010-0
7
2010-1
2
2011-0
5
2011-1
0
2012-0
3
2012-0
8
2013-0
1
2013-0
6
2013-1
1
2014-0
4
2014-0
9
2015-0
2
2015-0
7
2015-1
2
2016-0
5
2016-1
0
2017-0
3
2017-0
8
5-Year Posted 10-Year GoC Bond Yield
Selected mortgage interest rates, per cent
Source: Bank of Canada historical, CMHC Forecast
CANADA MORTGAGE AND HOUSING CORPORATION
Housing Market Activity
CANADA MORTGAGE AND HOUSING CORPORATION
Existing home sales on track to remain above 20-year average
0
1000
2000
3000
4000
5000
6000
7000
8000
20-Year Average
Source: Okanagan Mainline Real Estate Board (OMREB)
Total Residential MLS® Home Sales (Annual) – Kelowna CMA
-15%
CANADA MORTGAGE AND HOUSING CORPORATION
Sales trends pull back after record 2016
0
500
1000
1500
2000
2500
3000
Single-detached Townhome Apartment
2016 YTD 2017 YTD-22%
-11%
+3%
MLS® Sales by Dwelling Type – Kelowna CMA
Source: Okanagan Mainline Real Estate Board (OMREB)
CANADA MORTGAGE AND HOUSING CORPORATION
Similar trend in nearby centres
0
200
400
600
800
1000
1200
Vernon Penticton
2016 YTD 2017 YTD-13%
-2.1%
MLS® Sales by Dwelling Type –Vernon and Penticton
Source: OMREB, SOREB
CANADA MORTGAGE AND HOUSING CORPORATION
Strong price gains across all market segments in 2017
MLS® Average Prices over Time by Type of Dwelling – Kelowna CMA
+12%
+13%
+14%
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000Single-detached Townhome Apartment
Source: Okanagan Mainline Real Estate Board (OMREB), series represent seasonally adjusted 3-month moving averages
2017 YTD
+18%
+10%
+13%
2016
CANADA MORTGAGE AND HOUSING CORPORATION
Price trends vary across centres in the Okanagan
Total Residential MLS® Average Prices over Time
+9%
+4%+12%
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
Kelowna Penticton Vernon
Source: Okanagan Mainline Real Estate Board (OMREB), South Okanagan Real Estate Board (SOREB), series represent seasonally adjusted 3-month moving averages
2017 YTD
+14%
+11%+5%
2016
CANADA MORTGAGE AND HOUSING CORPORATION
Beginning to see listings trend upward in 2017
MLS® Total Residential Listings – Kelowna CMA
Source: Okanagan Mainline Real Estate Board (OMREB), figures are seasonally adjusted 3 month moving averages
0
200
400
600
800
1000
1200
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000Active Listings New Listings
CANADA MORTGAGE AND HOUSING CORPORATION
Market moving towards balanced conditions
MLS® Sales-to-Active-Listings Ratio – Kelowna CMA
Source: Okanagan Mainline Real Estate Board (OMREB)Note: The sales-to-active-listings ratio is 3 month moving average of the seasonally adjusted series.
0%
10%
20%
30%
40%
50%
60%Single-detached Multi-family
Balanced Market
CANADA MORTGAGE AND HOUSING CORPORATION
Days on market still well below long-run average
Source: Okanagan Mainline Real Estate Board (OMREB)
MLS® Average Days on Market – Kelowna CMA
30
40
50
60
70
80
90
100
110
120
Long-Run Average
2017 YTD
CANADA MORTGAGE AND HOUSING CORPORATION
Gap between single and multi-unit prices widening
Average Single-detached and Townhome Prices Relative to Apt Condo
Source: Okanagan Mainline Real Estate Board (OMREB), series represents 6-month moving average of theweighted average price by housing type, figures are for the Kelowna CMA
1
1.2
1.4
1.6
1.8
2
2.2
2.4Single-detached Townhouse
SFD2.04x
Row1.34x
Apartment =
CANADA MORTGAGE AND HOUSING CORPORATION
Carrying costs remain above long-run average
Monthly Payment for Mortgages of Average Priced Homes, Kelowna CMA
Inflation Adjusted (2016 Dollars)
Source: OMREB Avg. MLS® Prices, BoC Avg. 5-Yr fixed rate, Stats Can CPI (Inflation Adjusted), 20%
Downpayment, 25 Year Amortization
3,132
2,035
1,524
0
500
1000
1500
2000
2500
3000
3500
4000
1991M
01
1992M
02
1993M
03
1994M
04
1995M
05
1996M
06
1997M
07
1998M
08
1999M
09
2000M
10
2001M
11
2002M
12
2004M
01
2005M
02
2006M
03
2007M
04
2008M
05
2009M
06
2010M
07
2011M
08
2012M
09
2013M
10
2014M
11
2015M
12
2017M
01
Single-detached Townhouse Apartment
CANADA MORTGAGE AND HOUSING CORPORATION
Neighbourhood-level price gains vary significantly
2017 %Change in Average Sales Price – Top 15 Kelowna Sub Areas
Source: Okanagan Mainline Real Estate Board (OMREB)
7%9%
12%13%14%14%14%14%
16%17%17%
20%21%
24%24%
LCNW - Lake Country North West
NG - North Glenmore
GL - Glenmore
RS - Rutland South
SFS - Springfield/Spall
BL - Black Mountain
LH - Lakeview Heights
DM - Dilworth Mountain
SHLK - Shannon Lake
RN - Rutland North
WKE - West Kelowna Estates
WEC - Westbank Centre
SE - South East Kelowna
GA - Glenrosa
UM - Upper Mission
CANADA MORTGAGE AND HOUSING CORPORATION
Housing starts driven by new apartment rental
Housing Starts by Type and Intended Market – Kelowna CMA
Source: CMHC Starts and Completions Survey, August 2017 last data point
0
500
1000
1500
2000
2500
3000Single Semi-Detached Row Apt-Rental Apt-Condo
CANADA MORTGAGE AND HOUSING CORPORATION
Completed and Unsold Homes – Kelowna CMA
Source: CMHC Starts and Completions Survey, August 2017 last data point
Apartment condo inventories remain at zero in 2017
0
100
200
300
400
500
600
700Single Semi-Detached Row Apartment
CANADA MORTGAGE AND HOUSING CORPORATION
Rental completions spike between 2016-2017
Apartment Vacancy Rate vs Completions – Kelowna CMA
Source: CMHC Starts and Completions Survey & Rental Market Survey
-50
50
150
250
350
450
550
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5Apartment Rental Completions Apartment Vacancy Rate
CANADA MORTGAGE AND HOUSING CORPORATION
Average apartment rents up significantly
Average Rent Estimates for Units Built After 2000 – Kelowna CMA
Source: CMHC Rental Market Survey, Average Rent Estimates include all primary rental units built after year 2000.
Note: 2015 estimates for Bachelor and 3+ bedroom units were suppressed due to sample size.
945
1205
776
1094
1312
1544
0
200
400
600
800
1000
1200
1400
1600
1800
Bachelor 1 Bedroom 2 Bedroom 3 Bedroom+
2015 2016
CANADA MORTGAGE AND HOUSING CORPORATION
Carrying Cost to Rent Ratio (2 Bed Apt’s) – Kelowna CMA
Source: OMREB, CMHC, Bank of Canada, Statistics Canada
Note: The Carrying Cost to Rent Ratio is based on the average monthly carrying cost of a 2 bedroom apartment unit
(condo), including assumptions for strata fees, divided by average rents for 2 bedroom apartment rentals built after the year 2000.
Rising rents keeps carrying cost differential stable
0
0.5
1
1.5
2
2.5
CANADA MORTGAGE AND HOUSING CORPORATION
• 2017
• Likely going to be a record year for housing starts in the Kelowna CMA shooting past prior forecasts – mostly to do with rental construction.
• MLS Sales and Average Price growth to moderate slightly from pace seen in 2016. Rental vacancies to move up modestly as a result of new rental completions.
• 2018
• Anticipating fairly strong population growth, more in line with 2015
• Will result in a steady pace of sales in a similar range to 2017.
• Housing starts are anticipated to remain relatively high, however, they may moderate somewhat from a high seen in 2017. Shift to condos in 2018.
• MLS Average Price growth will continue to moderate. Rental vacancies are anticipated to increase in 2018 as a result of a greater volume of new rental completions.
Looking Ahead
CANADA MORTGAGE AND HOUSING CORPORATION
Housing Market Information Portal
4 Ways to Access Info:
Snapshots of Local,
Regional, and National data.
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multiple locations.
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map and charts.
Current and archived
CMHC publications.cmhc.ca/hmiportal
CANADA MORTGAGE AND HOUSING CORPORATION
All the latest Housing Related Research in One Place
CANADA MORTGAGE AND HOUSING CORPORATION
Taylor Pardy
tpardy@cmhc.ca
Tel: 604-737-4062
Thank You!
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