{"id":2989,"date":"2021-07-28T14:54:02","date_gmt":"2021-07-28T18:54:02","guid":{"rendered":"https:\/\/canadianlending.ca\/investors\/?p=2989"},"modified":"2023-05-17T16:21:43","modified_gmt":"2023-05-17T20:21:43","slug":"state-market-july-2021","status":"publish","type":"post","link":"https:\/\/staging.canadianlending.ca\/investors\/state-market-july-2021\/","title":{"rendered":"CMI State of the Market: Canadian Housing Market Experiences Much Needed Restraint as Property Values Soar"},"content":{"rendered":"

Canada\u2019s red-hot housing market showed further signs of stabilizing in June, as sales declined for a third consecutive month amid razor-thin inventories and rising prices. Despite posting consecutive declines, housing activity remains historically elevated, reflecting a strong post-Covid-19 recovery.\u00a0<\/span><\/p>\n

 <\/p>\n

National Home Sales Decline in June<\/b><\/p>\n

On a month-over-month basis, national home sales declined by 8.4% in June, according to the Canadian Real Estate Association (CREA). Sales are down a cumulative 25% from their recent peak. However, June sales still set a record for that month, with year-over-year transactions rising 13.6%.\u00a0<\/span><\/p>\n

 <\/p>\n

\"home<\/p>\n

Roughly 80% of local housing markets posted a decline in sales for June. However, sales activity remains well above the long-running average. | Chart: <\/i><\/b>CREA<\/i><\/b><\/a><\/p>\n

The number of newly listed properties\u2014a key measure of housing supply in the market\u2014rose 0.7% in June. The MLS Home Price Index climbed 0.9% on month and a whopping 24.4% annually.<\/span><\/p>\n

Cliff Stevenson, the Chair of CREA, commented on the supply-demand balance in the market:\u00a0<\/span><\/p>\n

\u201cWhile there is still a lot of activity in many housing markets across Canada, things have noticeably calmed down in the last few months [\u2026] There remains a shortage of supply in many parts of the country, but at least there isn\u2019t the same level of competition among buyers we were seeing a few months ago.\u201d<\/span><\/p>\n

 <\/p>\n

Labour Market Recovers\u2014But With a Caveat<\/b><\/p>\n

Following back-to-back months of sharp declines, Canada\u2019s labour market rebounded in June, as employers welcomed back 230,700 workers. The sharp increase coincided with the gradual easing of Covid-19 restrictions.<\/span><\/p>\n

 <\/p>\n

\"Unemployment<\/p>\n

Canada\u2019s job market is turning a corner following a new wave of Covid-19 lockdowns. | Data Source: <\/i><\/b>Statistics Canada<\/i><\/b><\/a><\/p>\n

Despite the strong headline number, a closer examination of the data revealed that all the gains were attributed to part-time work. This category basically returned to pre-pandemic levels in June, while full-time jobs fell 33,200 month-over-month.<\/span><\/p>\n

Overall unemployment fell to 7.8% from 8.2% in May as labour force participation increased 0.6 percentage points to 65.2%.\u00a0<\/span><\/p>\n

 <\/p>\n

Housing Affordability Deteriorating: RBC<\/b><\/p>\n

Canada\u2019s post-pandemic housing boom has had a negative impact on affordability, according to a new analysis by RBC\u2019s Robert Hogue. Affordability constraints are being especially felt in British Columbia, Ontario and Nova Scotia.\u00a0<\/span><\/p>\n

RBC\u2019s national aggregate measure of housing affordability reached the \u201cworst level in 31 years,\u201d Hogue said, explaining:<\/span><\/p>\n

\u201cThe ratio of ownership costs to household income\u2014which constitutes RBC\u2019s affordability measure\u2014jumped 0.9 percentage points overall in Canada to 52.0% (a rise represents a deterioration in affordability).\u201d<\/span><\/p>\n

Elevated demand for single-family homes is expected to keep property values trekking upward in the immediate term. Big-city condo markets, which were negatively impacted by the first wave of the pandemic, are also seeing increased activity, which is driving prices higher there as well.<\/span><\/p>\n

 <\/p>\n

Stocks Extend Record Run<\/b><\/p>\n

Wall Street and Canadian stocks extended their record-setting rally in early July, as investors continued to cheer the prospect of fiscal stimulus in the United States and signs of a broad economic recovery following the pandemic. Toronto\u2019s benchmark TSX Composite Index peaked north of 20,400 on July 7. Despite moderating, the benchmark continues to trade above 20,000.<\/span><\/p>\n

\"home<\/p>\n

The TSX Composite Index maintains its bullish outlook as demand for risk assets remains high. | Source: <\/i><\/b>Barchart.com<\/i><\/b><\/a>.\u00a0<\/i><\/b><\/p>\n

In the United States, the Dow Jones, S&P 500 and Nasdaq Composite Index all reached new peaks. Notably, the S&P 500 closed at record highs in seven consecutive sessions, marking the longest such streak since 1997.<\/span><\/p>\n

 <\/p>\n

CMI Financial Group\u2019s Mortgage Portfolio Expands in Q2<\/b><\/p>\n

Funding grew considerably across CMI Mortgage Investments for the quarter ending in June. Total lifetime funding reached $826 million with assets under management of $377M as at June 30.\u00a0 Our lending footprint continued to expand across Canada with a strong focus on risk management and capital preservation. The arrears rate across the entire portfolio was below 1.54% and the loss rate was negligible at 0.072%.\u00a0<\/span><\/p>\n

CMI\u2019s MIC portfolios continued to grow in the second quarter, reflecting strong investor demand for specialized mortgage investment solutions. CMI\u2019s flagship Balanced Mortgage Fund saw total funding surge by over 39% between March and June, with assets under management growing nearly 46% over the same period. The number of investors participating in the fund also grew by nearly 30%. The\u00a0 Fund generated a net annualized yield of 8.43% for investors over the quarter.\u00a0<\/span><\/p>\n

The CMI Prime Mortgage Fund and the CMI High Yield Opportunity Fund also registered strong growth in terms of investor inflows and total mortgage value. The average annualized net yield for the Prime Mortgage Fund was 6.33% for the quarter, well within the target range. The High Yield Opportunity Fund generated a net annualized yield of 10.43% consistently throughout the quarter.<\/span><\/p>\n

 <\/p>\n

Conclusion and Summary<\/b><\/p>\n

With Ontario joining other provinces in reopening its economy, Canada\u2019s economic outlook is turning positive again. As of July 9, nearly 68% of the Canadian population had received at least one dose of a Covid-19 vaccine. That rate is as high as 77.7% for people aged 12 and up.<\/span><\/p>\n

 <\/p>\n

What Happens Next?\u00a0<\/b><\/p>\n

CMI Financial Group will continue to analyze market changes and keep you updated on a regular basis. Visit our website to learn more.<\/span><\/p>\n

Learn more<\/a> about investing in private mortgages.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Canada\u2019s red-hot housing market showed further signs of stabilizing in June, as sales declined for a third consecutive month amid razor-thin inventories and rising prices. Despite posting consecutive declines, housing activity remains historically elevated, reflecting a strong post-Covid-19 recovery.\u00a0   National Home Sales Decline in June On a month-over-month basis, national home sales declined by … <\/p>\n

Continue reading “CMI State of the Market: Canadian Housing Market Experiences Much Needed Restraint as Property Values Soar”<\/span><\/a><\/p>\n","protected":false},"author":12,"featured_media":2990,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,87],"tags":[],"class_list":["post-2989","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-market-research"],"yoast_head":"\nCMI State of the Market: Canadian Housing Market Experiences Much Needed Restraint as Property Values Soar - Investors | Real Estate Secured Mortgage Investments<\/title>\n<meta name=\"description\" content=\"Canada\u2019s housing market is showing some much-needed restraint following a post-pandemic boom in 2020 and early 2021.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CMI State of the Market: Canadian Housing Market Experiences Much Needed Restraint as Property Values Soar - 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