The Canada Mortgage and Housing Corporation (CMHC) will shift its priority back to its originally intended purpose: helping Canadians buy homes they can afford.
“We help Canadians meet their housing needs, not exceed them,” Evan Siddall, CEO for CMHC told The Globe and Mail’s editorial board in an exclusive interview.
The crown corporation has aggressively restructured its offering by scaling back on certain programs and cutting others entirely, including its mortgage insurance for homes in excess of a million dollars.
Many brokers have lamented the fact that CMHC has outgrown its original intention and it’s an opinion that was shared by the late former finance minister, Jim Flaherty
“Regrettably, CMHC became something rather more grand, I think, than it was intended to be,” Flaherty told reporters in December. “We’ll see over time what that role should be.”
Originally established to give a helping hand to Canadians who otherwise would not be able to afford a home, CMHC has, more recently, made moves to help stimulate the economy; moves that are oft-debated among industry professionals.
“In 1991-92 the whole Canadian economy was in the toilet; high unemployment, especially in the construction trades. Real estate values in many areas had dropped by 20 per cent and CMHC came out with the five per cent down, use your RRSP, to buy only new construction homes,” David O’Gorman said on MortgageBrokerNews.ca. in February. “A stroke of absolute genius at the time. Stimulating a rotten economy towards recovery.”
Of course, the crown corporation has also been used to reign in an overheating market by implementing several rule changes.
Siddal told the Glove and Mail that right now the housing market is healthy but said that “if prices continue to grow, all things being equal, we would be worried.”