‘We’re close to the bottom’: Private market gets ready to turn the page
How COVID changed the game
A turning point arrived during the COVID-19 pandemic, when institutional investors flooded into the private lending market in significant numbers. Grechi said the process, rigour and competitive pressure that those companies brought have redefined the space entirely.
“What we’ve seen is the flock of institutional money through the MICs [mortgage investment corporations] and they very much have professionalized the space,” he said. “What we now refer to as private is kind of institutional, very regulated, very professional, extremely competitive. I think that’s the biggest change I’ve seen since we started in the business.”
That progress isn’t to say that the sector is an entirely safe bet. In its latest residential mortgage industry report, Canada Mortgage and Housing Corporation (CMHC) highlighted that what it labels mortgage investment entities (MIEs) are showing the strongest signs of stress among lenders, mainly because they’re more exposed to higher-risk borrowers than other institutions.
Risk among MIEs/MICs is especially concentrated in the Greater Toronto and Hamilton Area (GTHA), CMHC said, with the share of MIE balances in arrears for 90 days or more jumping from 3% in 2023’s third quarter to 11.1% by the first quarter of 2026 in that region.
But that segment represents “only a small part” of the market, the national housing agency added, with certain MICs likely at greater exposure than others in the current climate.
