Mortgage insurer weighs Alberta market

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Canada’s largest private mortgage insurer is watching closely for signs of risk in the Alberta housing market. Genworth’s chief executive Stuart Levings says that he expects to see mortgage delinquencies increase in the second half of this year as the impact of the oil industry slowdown starts to bite. Mr Levings, who was the mortgage insurer’s chief risk officer during the financial crisis, told the Globe and Mail that he doesn’t think the situation will be as big as it was back then. However he says Genworth is expecting unemployment to rise by 7 per cent and house prices to drop by 8 to 10 per cent in Alberta during this year.
 
  • Tony Piattelli on 2015-05-04 11:18:06 AM

    I was at a presentation completed by Genworth for our office regarding the risk in Calgary given the oil price collapse and the layoffs. What amazes me is how narrow their thinking is regarding the impact of the oil prices and the few layoffs experienced in Alberta. Note that many of those laid off were going to retire within the next few years and they are financially sound and many wouldn't even have a mortgage, hence no impact. There is still net migration coming into Alberta according to the graphs that they showed us, thus implying a growing population hence a continued demand for product. Will there be a slight increase in delinquencies yes, but will it be enough to impact values by 8% in Calgary, I venture to say highly unlikely. I'm basing this on 30 years in the industry and going through many of these layoffs within the oil and gas industry. Notice that you don't here them say anything about the fact that oil has rebounded to $67/bbl. From the low of $45, this would be a 45% increase in the cost of oil. Genworth is missing the mark on this one as they are trying to save the pennies and not seeing the loonies fly by by not booking sound business deals. Keep up the good work!

  • Tony Piattelli on 2015-05-04 11:18:21 AM

    I was at a presentation completed by Genworth for our office regarding the risk in Calgary given the oil price collapse and the layoffs. What amazes me is how narrow their thinking is regarding the impact of the oil prices and the few layoffs experienced in Alberta. Note that many of those laid off were going to retire within the next few years and they are financially sound and many wouldn't even have a mortgage, hence no impact. There is still net migration coming into Alberta according to the graphs that they showed us, thus implying a growing population hence a continued demand for product. Will there be a slight increase in delinquencies yes, but will it be enough to impact values by 8% in Calgary, I venture to say highly unlikely. I'm basing this on 30 years in the industry and going through many of these layoffs within the oil and gas industry. Notice that you don't here them say anything about the fact that oil has rebounded to $67/bbl. From the low of $45, this would be a 45% increase in the cost of oil. Genworth is missing the mark on this one as they are trying to save the pennies and not seeing the loonies fly by by not booking sound business deals. Keep up the good work!

  • Kevin on 2015-05-04 5:39:36 PM

    Nothing like taking a risk Genworth! What are you charging the high insurance fees for? Are you really predicting unemployment over 11% for 2015 in Alberta>

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