Canada : Financial Sector Assessment Program-Technical Note-Housing Finance

Author/Editor:

International Monetary Fund. Monetary and Capital Markets Department

Publication Date:

January 24, 2020

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

Housing finance is broadly resilient, but pockets of vulnerabilities exist. Mortgage finance is dominated by domestic systemically important financial institutions (D-SIFIs) and supported by the government via mortgage insurance, securitization guarantees, and other policies. With a market share of about 70 percent, D-SIFIs focus on prime borrowers, and their lending is backed by their strong balance sheets. The smaller (uninsured) non-prime lending segment is largely served by smaller banks and prudentially unregulated lenders, which are comparatively less resilient. Some of these lenders rely on less stable, higher-cost funding such as brokered deposits or redeemable equity, and their lending is concentrated in regions with large housing market imbalances. Market concerns about the business model of non-prime lending were manifested by the liquidity crisis at a mid-sized deposit-taking institution in 2017.

Series:

Country Report No. 20/17

English

Publication Date:

January 24, 2020

ISBN/ISSN:

9781513527147/1934-7685

Stock No:

1CANEA2020002

Format:

Paper

Pages:

23

Please address any questions about this title to publications@imf.org