One of the biggest red flags for Canada’s real estate bubble is that banks have become prominent critics. BMO chief economist Douglas Porter reminded clients this isn’t a supply issue. The bank warned last year that price growth would accelerate without demand measures. Instead of taking that advice, policymakers doubled down on the supply narrative. […]
Canadian real estate prices are surging like never before, but the market is cooling. Canadian Real Estate Association (CREA) data shows the inventory pressure eased in February. Despite big price gains, the SNLR revealed cooling conditions in 80% of major markets. Demand is forecast to cool further as rates rise and locked-in mortgages disappear. Sales […]
Canadian households briefly saw their debt issue shrink, but those days are long gone. According to Statistics Canada (Stat Can), the household debt to income ratio hit 186.23% in Q4 2021. The ratio had improved briefly as stores were closed and households paid down a little debt. The most recent update was massive though, reversing […]
The US is raising interest rates for the first time in years, and they plan to make up for lost time. The Federal Open Market Committee (FOMC), which governs the US Federal Reserve, announced a quarter-point hike today. This increases the federal funds rate lower (0.25%) and upper (0.50%) bounds for the first time since […]
Canadians are used to seeing their purchasing power vaporize, but not this fast. Statistics Canada (Stat Can) data shows annual growth for the consumer price index (CPI) hit 5.7% in February. The measure of inflation is at the highest level of growth since August 1991. Meanwhile shelter, one of the largest weights in the CPI […]
Canada’s late 1980s real estate bubble was so big it resulted in a correction lasting over a decade. That might have been small in contrast to where the current one is heading. BMO senior economist Robert Kavcic says affordability is currently stretched with low rates. As rates go through normalization, the bubble is expected to […]
Canadians should prepare to pay a lot more to borrow for a mortgage, as easy credit comes to an end. The Government of Canada (GoC) 5-year bond yield reached 1.978% today, the highest level in well over a year. A booming economy and soaring inflation are driving yield expectations higher. As the GoC 5-year bond […]
Canadian real estate prices aren’t cooling against the threat of higher interest rates. Canadian Real Estate Association (CREA) data shows it did the opposite in February. Prices were already growing at a fast rate last year, and that rate has nearly doubled since. Loose policy disrupted the real estate cycle, pushing the market into uncharted […]
Canadian new vehicle sales picked up, but supply chain hiccups are hitting the market. Statistics Canada (Stat Can) reported 94,624 new vehicles sold in January 2022, up 15.3% from the previous year. The increase is huge, but it’s being compared to the slowest January since 2011. The second slowest was this past one, as the […]
One of Canada’s largest banks just made the most aggressive interest rate forecast yet. Scotiabank now sees the Bank of Canada (BoC) overnight rate hitting 3.0% by next year. The bank acknowledges it’s an aggressive call, but it’s needed to control inflation. They feel the BoC kept rates too low for too long, and now […]
