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Our Lending Strategy During and After COVID<\/b><\/p>\n
The beginning of the pandemic saw a sudden and dramatic dip in the economy as everyone put the brakes on business. For borrowers, this meant a sudden drop in cash flow as more people were laid off or furloughed.<\/span><\/p>\n For CMI, that meant adapting our lending focus in terms of the types of loans we offered. We took a progressive approach to deals to accommodate those who were laid off or out of work, which meant providing the option of prepaying mortgages for the whole term to give borrowers time to get back on their feet. We also increased the geographic diversification of our loan portfolio in step with increased real estate activity outside of urban markets.<\/span><\/p>\n <\/p>\n A New Boom in Small Communities<\/b><\/p>\n While mortgage investing has traditionally been very focused on opportunities in large urban centres, the pandemic has seen real estate in smaller communities flourish. New remote working arrangements have given Canadians <\/span>more flexibility<\/span> to move away from large urban centres, as they no longer need to commute to work. And although the beginning of 2021 has seen a rebound in traditional employment, many Canadians are <\/span>still working from home<\/span>. This has ultimately led to an unexpected real estate boom in smaller communities, in spite of unemployment rates.<\/span><\/p>\n While low interest rates and tightened restrictions on borrowers have made lenders reluctant to take risks, this movement has built investor confidence around opportunities outside of major centres. There have always been compelling opportunities outside of cities, but the new shift adds weight to their importance moving forward.<\/span><\/p>\n <\/p>\n Will COVID Vaccines Impact the Market?<\/b><\/p>\n Accommodation and food services sectors were <\/span>hard hit<\/span> by the pandemic, but the real estate sector in Canada has suffered less of a fallout. Over the course of the pandemic, people\u2019s focus shifted towards their homes; many homeowners made renovations and recognized the need for more space. As a result, the real estate market has seen growth over the course of 2020; according to RE\/MAX,\u00a0 <\/span>52% of Canadians<\/span> \u201cbelieve that real estate will remain one of the best investment options in 2021.\u201d<\/span><\/p>\n Looking ahead, <\/span>CREA\u2019s Economist Ryan Biln predicts<\/span> we may see an influx of newcomers ready to buy homes as Canada\u2019s borders open up post-vaccine, particularly with Canada\u2019s ambitious immigration targets. Ultimately, however, we think that while the vaccine may have a positive impact on the real estate market, the relative robustness of the real estate market throughout the pandemic means that the vaccine arrival date won\u2019t make as much of a difference to real estate as it will to other sectors.\u00a0<\/span><\/p>\n <\/p>\n Mortgage Lenders see a Silver Lining<\/b><\/p>\n As more people see the light at the end of the pandemic tunnel, we anticipate that the real estate market will see steady growth. Investors and borrowers will become more confident, but a more conservative approach from banks will mean more opportunities for mortgage investors. The <\/span>RE\/MAX Canadian Housing Market Outlook<\/span> predicts that, \u201cHeading into the new year, 84 per cent of RE\/MAX brokers and agents surveyed are anticipating sellers\u2019 markets.\u201d<\/span><\/p>\n
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