CMHC releases results for Q1 2023

Ottawa, May 30, 2023

A decline in home sales due to unfavourable economic factors including high interest rates and elevated household debt impacted financial results for Canada Mortgage and Housing Corporation (CMHC) in the first quarter, as indicated in the Q1 2023 Quarterly Financial Report released today.

Higher house prices, increased borrowing costs, inflation and elevated levels of household debt have made homeownership less affordable. This has resulted in lower transactional homeowner unit volumes consistent with decreases in MLS^® sales relative to the same quarter in 2022. Labour shortages, combined with elevated construction and financing costs are constraining new housing construction activity. This is exacerbating current housing supply shortfalls, notably in Toronto and Vancouver, and contributing to house prices remaining high.

We saw an increase in our multi-unit insurance volumes compared to Q1 2022.This is largely due to MLI Select, an innovative multi-unit mortgage loan insurance product that incentivizes the preservation and creation of rental supply by offering lower cost insurance to housing providers who meet affordability, accessibility, and climate compatibility criteria.

Quote:

“We are seeing the impact of current economic conditions on our results, notably a decline in homeownership transactions due to the high cost of borrowing. We remain in a strong position to withstand further economic volatility and continue to uphold stability in the financial system by providing support for Canadians in housing need through our programs. We will continue to monitor the impacts of evolving market conditions on our business.”
— Michel Tremblay, Chief Financial Officer and Senior Vice-President, Corporate Services

Additional highlights for the three-month period ending March 31, 2023:

Net income for Q1 was $331 million, down from $345 million in Q1 2022*. This is mainly due to a decrease in insurance service results, which were partially offset by higher net interest income and investment income from higher interest rates.
We declared $395 million in dividends to our shareholder, the Government of Canada in Q1 2023, which were paid in April 2023.
The national mortgage arrears rate increased slightly to 0.28% compared to 0.27% in the same quarter last year.
Transactional homeowner unit volumes were at 7,090 in Q1 compared to 12,438 in Q1 2022.
MLS® sales are down 38% in this quarter relative to the same quarter in 2022.
Multi-unit insurance unit volumes at 44,568 in Q1 of this year, compared to 41,789 in Q1 2022.
Movements in interest rates continued to result in volatility in our investments and defined benefit plans in the first quarter of 2023.
On January 1, 2023, we adopted IFRS 17 Insurance contracts (IFRS 17) as issued by the International Accounting Standards Board for the first time. We have applied IFRS 17 retrospectively and have restated our 2022 comparative results. This has had a significant impact on our financial results as further discussed in the quarterly financial report.

* 2022 results have been restated for impacts of IFRS 17

Q1 Highlights	Three months ended 31 March 2023
Net income ($M)	331
Government funding ($M)	2,136
New securities guaranteed ($B)	43
Insured volumes (units): Transactional homeowner insurance	7,090
Insured volumes (units): Portfolio insurance	3,663
Insured volumes (units): Multi-unit residential insurance	44,568

Capital management	As at 31 March 2023
Total Mortgage Insurance capital ($B)	9.9
Mortgage Insurance capital available to minimum capital required (%)	176%
Total Mortgage Funding capital available ($B)	1.4
Economic capital available to capital required (Mortgage Funding) (%)	114%
Insurance-in-force ($B)	400
Guarantees-in-force ($B)	481
Canadian residential mortgages with CMHC insurance coverage (%)	19.2%
National mortgage arrears rate (%)	0.28%

The full Quarterly Financial Report is available online.

We continue to deliver the National Housing Strategy (NHS), a 10-year initiative with investments of more than $82 billion, giving more Canadians a place to call home. The NHS covers the entire housing continuum, from shelters and transitional housing to community and affordable housing, to market rental and homeownership. We report progress on the achievement of NHS targets quarterly online.

CMHC supports the housing market and financial system stability by providing support for Canadians in housing need, and by offering housing research and advice to all levels of government, consumers and the housing industry in Canada.