OTTAWA: During the #pandemic, Canadians working in services, construction & retail deferred their mortgages more than others.
This was linked to an increase in the unemployment rate in these industries. The Canada Housing and Mortgage Corporation said in a research paper that those working in the Government, Education and Health sectors had a below-average share.
This is observed at the national level, as well as for the provinces.
• The occurrences of deferrals positively correlate with the change in the unemployment rate in these industries.
•The reduction in deferred mortgages distributed evenly across the borrower’s employment industry. As at September 30, 2020, 7.2% of the CMHC insured homeowner transactional mortgages remained in deferral. CMHC said that Among the CMHC insured homeowner transactional mortgages that were outstanding as at March 31, 2020, 17.1% had exercised the payment deferral options by the end of May.
The share of deferred mortgages by the borrower’s employment industry is largely consistent with the distribution of the outstanding loans. The Leisure/Entertainment industry also experienced a 12.9% increase in the unemployment rate during the same period.
This did not produce a large volume of deferrals, as borrowers in this sector account for only 1.2% of the in-force mortgages.
The Services (331,400), Retail Sales (180,600) and Construction (134,500) sectors reported the largest increases in the number of unemployed persons.5 These sectors represented a higher than average share in deferrals seen for the CMHC insured transactional homeowner mortgages.
By the end of June, 17.9% of the outstanding homeowner transactional mortgages insured by CMHC had exercised the payment deferral option. Quebec, Alberta, Ontario and British Columbia accounted for 79.8% of the outstanding mortgages and 80.8% of all the deferrals.
Figure 4 compares the provinces’ share in the deferred mortgages and their share in outstanding loans. Alberta’s share in the deferred mortgages was greater than its share of the outstanding loans. Ontario and British Columbia’s share in the deferred mortgages was smaller than their share of the outstanding loans.
At the national level, Canadian borrowers working in the Services, Retail Sales and Construction sectors had an above-average share in deferrals.
As at September 30, 2020, 7.2% of the CMHC insured homeowner transactional mortgages were still active in deferral. The reduction in deferred mortgages distributed evenly across the borrower’s employment industry