SCHL Update | Insurance that double for certain manufacturers

As of Sunday, real estate developers across Canada will see their mortgage insurance premium explode. Similarly, If this announcement has had the effect of a bomb in the industry. Moreover, it jeopardizes the future of many multi -residential projects in the midst of housing crisis, according to the Institute of Urban Development of Quebec.

All the multi -residential buildings in Canada of five dwellings. Moreover, more are affected by this update of the tariffs of the Canadian Mortgage and Housing Company (SCHL), unveiled on July 3 by press release.

“Suddenly. For example, I received one, two, three, schl update | insurance double four, five phones [de promoteurs]… It started to sound, ”reports the director of the Quebec Urban Development Institute (IDU), Isabelle Melançon. Furthermore, “It will put projects not only on break. Nevertheless, but there is a danger of life or death for some of them,” she adds.

From Sunday. In addition, 11 days after the company’s announcement, Canadian real estate developers will face substantial increases on the insurance premium for their loan.

Concretely. For example, the increases vary between 70 % and 140 %, estimates Tommy Archambault, president and founder of the Levier Immobilier agency, which had to do a call of calls to inform its customers. “It’s major,” reacts the mortgage broker.

As an example, The press contacted a promoter whose residential construction project is located in Montreal.

The schl update | insurance double cost of the insurance premium for its loan will go next Sunday from 5 million to… 11 million.

“It doubts the continuation of my project. absolutely,” said the latter, who wanted not to be appointed not to harm his relations with the SCHL, the only mortgage loan supplier for residential collective buildings in Canada.

In its publication. the SCHL explains that changes will provide more flexible financing options, such as longer reimbursement periods and reduced funding. They also aim to respect new rules that require more capital in reserve to cover loans.

If the impact of this measure is first felt on the promoters. it will be potentially the tenants who will receive them at the end of the chain, signals Mr. Archambault, as the latter may see their rents increase to compensate for additional schl update | insurance double costs.

“It creates not only uncertainty, but also a huge bottleneck in the midst of a housing crisis,” said Mr.^me Melançon. Cost of building materials. labor, American tariff measures: the multi-residential construction industry is already faced with profitability challenges for several years, she said.

This increase in premiums could therefore discourage certain promoters from launching new projects, and ultimately reducing housing supply.

Joined by email. the SCHL has explained that “SCHL mortgage loan insurance products for collective housing will continue to offer housing builders benefits from conventional financing,” it was said.

Schl update | insurance double

Affordable

The president of the IDU stresses that this measure also includes affordable housing. A paradoxical situation, in its opinion, where financing costs become “unaffordable” to say the least.

The manufacturer interviewed by The press had the intention of making 20 % affordable housing in his project. but he wonders how it can materialize with the announcement of the SCHL.

“We required affordable accommodation in our project. But where will this affordability come from? wonders the promoter. We must give us tools. Affairs, we don’t have it on the workers’ side, we don’t have it on the side of the materials. Lands, they will not lose value either. So if we don’t give a helping hand via these programs, who will help us? »»

According to the SCHL. the cost of premiums, however, represents a low proportion of the overall cost of developing a rental project, generally less than 2 %.