Time for your cheat sheet on this week’s top stories. Canadian Real Estate Canadian Real Estate’s Worst Case Is A 30% Price Drop, Still Down By 2027: RBC Canada’s largest bank is preparing for a big drop in home prices in a downturn. RBC’s worst case scenario for Canadian real estate is a 30% price […]
Canada borrowed debt so households didn’t have to, but they went ahead and borrowed anyway. Bank of Canada (BoC) data shows the share of highly indebted mortgage borrowers pushed to a new high in Q1 2022. These borrowers, with at least a 450% debt-to-income (DTI) ratio, now represent 1 in 4 mortgages. It sounds bad, […]
First-time home buyers are out and investors are in. That’s the takeaway from Bank of Canada (BoC) data showing the share of real estate investors in the market. Before 2020, investor demand for real estate was beginning to slow down. When rates were cut in 2020, it sparked a new wave of investor demand that […]
Canadian real estate went from the narrative prices will always rise, to “look out below” in a matter of weeks. It’s not surprising to see a fickle public change their mind that fast, but it’s odd to see the Bank of Canada (BoC) do it. In the House Price Exuberance Indicator (HPEI) for Q1 2022, […]
Canadians should say good-bye to the 15-or-so year experiment with cheap debt, because it’s over. Government of Canada (GoC) 5-year bond yields continued to boom, accelerating this week. The yield now sits at the highest level since before the Great Recession and isn’t expected to slow down. Mortgage rates will see a big impact from […]
Canada’s improvements in poverty proved to be more transitory than inflation. New survey data from Food Banks Canada (FBC) shows over a fifth of households have recently gone hungry. With inflation running higher than incomes, many households can’t easily absorb rising costs. FBC found more food bank users are citing high inflation and rising shelter […]
Fewer Canadians were taking out new mortgages, even before the rate hikes began. Mortgage origination data from TransUnion shows how originations fell sharply in Q4 2021. Not one province showed annual growth, with Ontario leading the way lower. As Canadian real estate prices climbed, fewer people were qualified to buy. This can act as friction […]
No need to worry about your local home builder’s profit margin — they’re actually rising. CoConstruct, who provides construction project management software to over 100,000 clients, took a dive into builder margins. Analyzing client data, they found home builder profit margins climbed in Canada and the US. Despite rising material costs, buyers have been willing […]
Canadian institutions are showing fading optimism, according to a new survey. The Bank of Canada (BoC) released the Spring 2022 results of its Financial System Survey (FSS). The FSS is a twice-yearly poll of risk managers, allowing the BoC to compare expectations to their own. Results from the survey show more institutions expect a financial […]
Canada’s largest bank is bullish on the economy but not on home prices. RBC regulatory filings reveal they see home prices making a modest decline by next year. That’s if the economy encounters no unexpected hiccups. However, the bank warns they’ve placed more weight to the downside as the outlook darkens. In the downside scenario, […]
