Canada’s real estate downturn will continue next year, warns a credit rating giant. Fitch Ratings released its 2023 forecast calling even lower home prices next year. After 3-decades of strong price growth without correction, affordability has never been worse. When combined with high rates, weak demand is expected in the near-term as home prices adjust. […]
Canadian mortgage debt is slowing, but it’s way past the point of becoming a problem. Bank of Canada (BoC) data shows outstanding mortgage credit slowed in October 2022. However, slow growth is still growth—households now owe the equivalent of the country’s economic output. At this level, debt will pile up much faster than GDP grows, […]
Canada’s highly indebted households are in a pickle after an epic debt binge. Statistics Canada (Stat Can) data shows the household debt to income ratio (DTI) climbed sharply in Q3 2022. Canada already had some of the most highly indebted households in the world. As the ratio climbs even further, they become more vulnerable to […]
Canadians believe interest rates will fall soon, and it’s now obvious in real estate. That’s the take from BMO Capital Markets, who sees this having unintended consequences. In a weekend research piece, they explain more investors are holding out for rate cuts. This will lead to maintaining lofty growth expectations and sticky inflation, making cuts […]
Canada’s bank regulator is quietly asking the country’s largest banks to put aside a lot more rainy day cash. OSFI, Canada’s bank regulator, increased the domestic stability buffer (DSB) on Thursday. The move would see its Big Six financial institutions set aside significantly more capital for a risk-related event. The move will lower the need […]
Canada’s mortgage stress tests seemed excessive last year, but they were insufficient. The recent Bank of Canada (BoC) rate hike pushed a number of variable rate borrowers above their stress test rate. BMO warns these borrowers haven’t been risk-tested for the current environment. Canadian Mortgage Borrowers Haven’t Been Stress Tested For Rates This High The […]
Canada’s highly indebted households are starting to show serious signs of debt overload. Equifax data shows the rate of auto loan delinquencies hit a rarely seen level in Q3 2022. Consumer credit in general has seen rates begin to climb as interest rates rise. Housing remains the one exception, though that’s likely to change as […]
Every asset bubble has common issues, and leads to a scramble to identify which bubble we’re in. After all, if you identify which bubble this is like, you might be able to identify the outcome. BMO Capital Markets shared the similarities of this cycle with five major booms-and-busts. Here’s what’s similar, and what isn’t. Post-War […]
Canada’s variable rate mortgage borrowers—brace yourself. BMO Capital Markets has made another upward revision to its interest rate forecast this week. The bank was forced to make a revision as sticky inflation and rising wages require much higher interest rates to cool activity. Canada’s overnight policy rate is now forecast to hit the highest level […]
Time for your cheat sheet on this week’s top stories. Canadian Real Estate The Canadian Real Estate Wealth Boom Is Over, Expect $1.6 Trillion In Losses: RBC Canadian real estate values soared over the past few years, helping to drive wealth. However, now that we’re past peak — RBC sees housing pulling wealth back. The […]
