Robyn Adamache Client Relations Manager ... - Okanagan Chapter · Finance, insurance, real estate Trade Public Admin Transportation and warehousing Professional, scientific and technical

CANADA MORTGAGE AND HOUSING CORPORATION

Robyn Adamache

Client Relations Manager

CMHC Multi-Unit Insurance, BC


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


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!


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


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


Minimum mandatory requirements

SOCIAL OUTCOME DRIVEN

Affordability Financial Viability

Energy Efficiency

Accessibility

1 2 3 4


Multi-Unit Policy Enhancements for Affordable Housing


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


Affordable housing flexibilities

9

Expanded definition

of affordability

Extended to

existing properties

Enhanced

underwriting

flexibilities


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


More information [email protected] 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

[email protected]

Multi-Unit MLI for New and Existing Market and Affordable Housing

http://www.cmhc.ca/multi-unit

http://www.financinginitiative.ca/

mailto:[email protected]


Kelowna CMAHousing Market OutlookSeptember 28, 2017


Economic and Demographic Factors Affecting the Housing Market


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


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


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


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



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



• 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


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


Migration of seniors more prevalent relative to 2008


Total Net-migration by Age Group – Kelowna CMA

0

200

400

600

800

1000

1200

1400

2008 2012 2016


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


Growth in baby boomers will be offset by millenials and Gen X/Y

Projected Population Growth of Individuals Aged 20 to 44 – Kelowna CMA


-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


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



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


Housing Market Activity


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%


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



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


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


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


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


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


Days on market still well below long-run average


MLS® Average Days on Market – Kelowna CMA

30

40

50

60

70

80

90

100

110

120

Long-Run Average

2017 YTD


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 =


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


Neighbourhood-level price gains vary significantly

2017 %Change in Average Sales Price – Top 15 Kelowna Sub Areas


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


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


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


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


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


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


• 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


Housing Market Information Portal

4 Ways to Access Info:

Snapshots of Local,

Regional, and National data.

Compare statistics for

multiple locations.

Comprehensive tables,

map and charts.

Current and archived

CMHC publications.cmhc.ca/hmiportal


All the latest Housing Related Research in One Place


Taylor Pardy

[email protected]

Tel: 604-737-4062

Thank You!

http://www.cmhc.ca/housingmarketinformation

Documents

Robyn Adamache Client Relations Manager ... - Okanagan Chapter · Finance, insurance, real estate Trade Public Admin Transportation and warehousing Professional, scientific and technical