First National Financial LP

A market update (and thank you) from your First National Atlantic Canada team

  • Jody Comeau, Assistant Vice President, Commercial Financing

As we take stock of the year so far, I want to thank you for making the first half of 2023 productive and meaningful for your Atlantic Canada team at First National. 

Significant demand in our key regions, particularly Halifax but also Saint John and Charlottetown, translated into strong new mortgage originations as well as renewals through June. Based on those results plus new commitments to fund mortgages this fall, I anticipate we will exceed last year’s record value of multi-family residential mortgage financings when the final annual results for our team are tallied.

Considering the underlying drivers of this performance, we can point to several factors. First, demand for apartments has grown in the Maritimes as evidenced by strong rental rates and absorption. Despite higher interest rates, CBRE also shows cap rates for Halifax holding steady for the multi-residential sector. Positive fundamentals in the face of challenging economic conditions are supporting construction activity with First National participating in sizeable new financings.

Second, CMHC’s recent decision to increase premiums led to a surge of submissions prior to the effective date of June 19th – particularly for MLI Select. This surge is a one-time event. However, the importance of CMHC will endure because the national housing agency is determined to support the creation and preservation of rental housing, which is a long-term societal goal (and one First National shares.)

Third, First National’s growing profile is bringing more business our way. While we also offer conventional mortgages, we see the popularity of our insured programs rising because they are economically superior in this market environment due to ultra-competitive interest rates, LTVs/LTCs and length of amortization.  

Not to be missed is that First National continues to enjoy the benefit of relationships with developers and asset owners in Atlantic Canada who know how to manage well for the times. Working with you makes all the difference.

Hitting stride

With the great results achieved to date this year, I really must single out my colleagues in Atlantic Canada for well-deserved praise. Flawless execution is standard operating practice for them but they outperformed even their own high standards by delivering on the many commitments we made.

To give credit where it’s due, I’m grateful for the ongoing and lasting contributions made by Lisa McFarlane (Director and Underwriting Team Lead), Jeremie LeBlanc (Director), Braeden Coyle (Analyst), Noah Wilson (Analyst) and Christopher Cox (Analyst) and of course my colleague Michael Williams (Vice President - Commercial Financing - Québec and Atlantic Canada). Together, this team is hitting stride at an important time in the market cycle. Also noteworthy is that while Chris is new to our team, he has already made his presence known as a tireless client advocate and well-informed underwriter who brings insight to every deal through detailed financial modelling.

Looking ahead

We anticipate a strong finish to 2023 here in Atlantic Canada as we fund our commitments. We also know the challenges of higher interest rates will remain until the Bank of Canada finally finishes its work to reduce inflation. 

Against this backdrop, I would encourage you to stay in close contact with our team. Market insights, planning advice, and financial modelling are always best when done early and often.  In my view, timing is the essence of the empowerment we seek to bring you.

Thank you for your support and for making this a meaningful year so far.