MCAN says that there are still challenges ahead for the Canadian residential real estate market.
It says that there were signs of improvement in the second half of 2018 as buyers continued to adjust to the new mortgage rules and the increasing interest rate environment.
But for 2019, the firm sees mixed performance as regional markets adjust to both regulatory changes and local economic conditions.
Overall, downward pricing pressure and uncertainty is expected along with affordability challenges if interest rates continue to rise.
The mortgage investment corporation has just published its financial results for Q4 2018 with net income of $3.5 million, down 67% from $10.8 million ($0.47 per share) in the fourth quarter of 2017.
Net income for the fourth quarter of 2018 included a $4.2 million unrealized loss on marketable securities, which negatively impacted earnings per share by $0.17. Net income for fiscal 2018 was $36.3 million ($1.54 per share), a decrease of $3.6 million (9%) from $39.9 million ($1.72 per share) in 2017.
Increase in mortgage portfolio activity
Corporate assets increased by $42 million (4%) year-over-year reflecting an increase of $59 million (7%) in the firm’s corporate mortgage portfolio.
Corporate mortgage portfolio activity included increases of $57 million in uninsured single family, $42 million in construction and $31 million in insured single family, partially offset by decreases of $43 million in uninsured completed inventory and $28 million in commercial.
Corporate mortgage originations increased by 32% to $391 million in 2018 from $295 million in 2017, including increases of $76 million and $55 million in uninsured and insured single family, respectively.
"Our corporate mortgage portfolio and net corporate mortgage spread income increased 7% and 3% respectively during 2018, despite market conditions," said Karen Weaver, Chief Executive Officer, Interim. "We continue to be focused on building our business and delivering a sustainable dividend to shareholders. As Interim CEO, it is a pleasure to lead a committed and talented executive team in achieving our objectives".
