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 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 […]
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 […]
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 […]
Canadian employment made huge gains, as the economy continues to bounce back. Statistics Canada (Stat Can) reported employment increased by 337,000 (+1.8%) jobs in February. Rising jobs pushed the unemployment rate down to just 5.5%, the lowest since May 2019, before public health measures. Experts see the robust employment gains supporting much higher interest rates. […]
Canadian real estate has a new risk factor catching the attention of regulators — CLPs. Combined Mortgage-HELOC Loan Plans (CLPs), better known as readvanceable mortgages, are fueling higher home prices. That was the take from OSFI, the country’s bank regulator. CLPs are rarely mentioned by regulators, but they’ve come up in several speeches since last […]
We’re only two months into the year but Canada’s real estate market is seeing the inventory story change fast. An analysis from RBC shows key markets have seen inventory improve for February. The bank hesitates to call it a trend, but markets are getting close to “balanced.” As interest rates rise, home sales are expected […]
