CMHC Still Bracing For COVID Impact
Despite a housing market that broke records in July, the Canada Mortgage and Housing Corp. (CMHC) is still bracing for further impacts from the COVID-19 pandemic. Its second-quarter financial results says the market will have to expect short-term uncertainty, as well as falling housing demand from weaker household incomes in the medium term. It says the economic shock of the pandemic has not yet been fully reflected in the latest housing market data, predicting the process of containing COVID-19 could still pose a risk to sales and new building projects. "While it will take several months for the economic impacts of COVID-19 to fully materialize, some factors are starting to work their way into in our financial results - for example, we are starting to see the impacts in our provisions for insurance claims," says Lisa Williams, CMHC's chief financial officer. It is reporting net income of $566 million in the three months ending June 30, up from $379 million during the same period last year, with an arrears rate of 0.34 per cent. It also saw claims expenses jump by $256 million, or 711 per cent, due to an increase in provisions for COVID-19 related claims, including the outlook for mortgage loans currently in deferral.