by Paolo Taruc
MCAN expects housing market condition across the country to be volatile for the rest of the year, as markets are adjusting to an “unprecedented level” of regulatory and policy changes affecting mortgage insurance rules, foreign buyer taxes, underwriting requirements for regulated lenders and rising interest rates.
In its latest earnings report released Friday, the company said residential real estate markets continue to have a mixed performance as regional markets adjust to local economic conditions. In particular, employment in the Prairie Provinces continues to feel the sting of low oil prices. A strengthening Canadian dollar may also be a bane to manufacturing jobs.
MCAN saw its net income rise to $9.9m during the third quarter this year, marking a 1% growth from $9.8m during the same period in 2016. On a year-to-date basis, the firm’s net income stands at $29.1m, about 7% ($2.1m) lower from 2016’s $31.2m.
The company added that recently announced increases in immigration levels by the federal government are expected to positively impact housing markets, particularly those that are supply-constrained such as Toronto and Vancouver.
It will take 6 to 12 months to see the full impact of these changes on housing sale volumes and prices. “We expect home sale levels to slow as buyers react to the uncertainty caused by the multiple rule changes, the evidence of increases in listings and decreases in sales volumes. We expect to see some level of weakness in resale markets as markets adjust to fewer buyers and more available listings,” it added.
For its part, the firm said it is well positioned against the regulatory changes, as it has made significant changes to its underwriting procedures over the past 18 months.
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