Reader Question – “What Percentage Of Residential RE Sales In The Lower Mainland Are CMHC Insured?”

A reader has e-mailed us requesting a percentage breakdown of residential RE sales in the BC lower mainland by:
1. CMHC insured
2. non-CMHC insured
3. cash sales.
A very fair question for anyone interested in the local RE market, but not a straightforward one to answer. We have e-mailed a few knowledgable sources who have come up with useful but indirect answers.
Is there anybody out there who can give us an accurate answer?
What percentage of residential RE sales in the lower mainland are CMHC insured?
Thanks. – vreaa

8 responses to “Reader Question – “What Percentage Of Residential RE Sales In The Lower Mainland Are CMHC Insured?”

  1. I don’t think you are going to be able to sort out which properties have portfolio insurance on them from the bank.

  2. Very difficult to quantify by sales in the lower mainland, but here some estimates for BC using public data.


    [1] According to recent CBA data, the total number of mortgages outstanding is 4,224,047, of which BC accounts for 606,678 (14.3%).

    [2] According to the big five banks’ monthly covered bond reports, the total number of mortgages pooled is 460,746,000, of which BC accounts for 68,733,000 (14.9%).

    —With CBA’s data and covered bond allocation, an average of 14.6% can be used for determining BC’s market share of all Canadian mortgages.

    [3] According to BoC data, total residential mortgages credit is $1,106,937,000,000, of which BC (Q3 data by province) accounts for $110,344,000,000 (9.9%).

    [4] According to OSFI data, total insured and uninsured mortgages held by domestic Canadian banks stands at $877,492,833,000, of which $526,844,689,000 is insured (60%).

    —The $877 billion excludes HELOCs, reversed mortgages, ect.

    [5} CMHC has a market share of 80% of all insured mortgages.

    With the above data we can estimate the the total amount and number of mortgages for BC as follows:

    Number of Mortgages — CBA data shows 606,678 mortgages for BC, of which an estimate of 60% is insured by the banks (364,007), of which CMHC has 80% share of (291,205).

    Amount of Mortgages — BoC data shows $110,344,000,000 in mortgage credit for BC, of which 60% is insured ($66,206,400,000), of which CMHC has an 80% share of ($52,965,120,000).


    Therefore, $52,965,120,000 divided by 291,205 mortgages gives us an average of $181,882 of insurance per household. However, these figures are not entirely accurate as our banks have begun hiding bad loans via repo swaps with the BoC and Fed (foreign branches).

    There’s a reason why OSFI chooses to look the other way..

    • I see statistical problems with that.
      Point #2 must be a typo, there aren’t 460,746,000 mortgages in Canada!
      Ignoring that, considering the situation in BC, I doubt we have over 14% of the mortgages, but less than 10% of the dollars.
      Finally, you used total dollar amounts to arrive at 60% insured, then used that figure on the number of mortgages. Given that the larger dollar amount mortgages are more likely to be insured, we must have less than the dollar amount % for the number of insured mortgages. But also BC would tend to be a higher insured % than the national average, considering we lead the pack by a big margin in all measures of indebtedness.
      Interesting question all right, but that doesn’t answer it.

      • Just noticed as well, the question was how many sales are insured, hence newly issued mortgages. Total mortgage data is useless.
        Ben Rabidoux at The Economic Analyst has done a lot of number crunching on the debt problem, he might have a pretty good estimate.

      • Correct that was a typo. There are 460,746 mortgages pooled in covered bonds of which 68,733 are based in BC (14.9%). I only used this data as an additional allocation percentage.

        We wouldn’t have to do this if CMHC wasn’t the most secret quasi-government agency amongst G20 nations. Especailly with foreclosure statistics which should be made public.

    • Awesome. A good start, we can prorate based on average debt levels by province.

  3. Hey, you might want to headline this story from today’s Financial Post about CMHC insuring foreign student housing:

    • Thanks, Skeptic. Great artice. I think Dianne Francis is on the right track here. Our country faces tremendous risks associated with weak CMHC mortgage regulation that was developed with a liberal bias of equity and fairness but never gave fair consideration to how foreign capital would take advantage of the weaknesses inherant. Hot money flows are becoming a hazard to not only the levels of debt insured where mortgages are concerned but also in the way prices are driven up by demand from unexpected sources. This impacts all Canadians and it is we who will ultimately pay the costs. Indeed, with housing in some parts of the country doubling over very short periods of time we are paying already. The idea that this kind of foreign investment is enriching our country is not ringing true anymore. So the question we might ask is this: Why should our standard of living fall as house prices rise dramatically and when that same rise is being fueled by hot money seeking shelter in our country? Is that fair to us? I look forward to whatever corrective actions are introduced by OSFI and we all should hope that same organization will ultimately be the watchdog for CMHC as some of the irritants are smoothed out of the system.

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