Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada’s labor market is weakening, but the weakness may be greatly overstated. Experts argue that post-recession, seasonal consumption patterns change in a way that is hard to measure until after the fact. As a result, even the US Federal Reserve warned the latest data will be subject to over and under adjustments. That may be what’s happening now, as Canada’s seasonally adjusted unemployment rate rips higher—but its unadjusted rate remains near a record low. Policymakers are warned that misreading this trend can amplify negative outcomes.
Canada is once again extending its vacant home filing deadline, delaying its count. Just hours before the filings were due, the Minister of National Revenue extended the deadline by another six months. This was the second extension, but unlike the previous one—this one had just hours before the deadline. The reason will forever be a mystery, but the extension helps to conceal the country’s vacant home count for another year. It resembles a tactic used by countries trying to hide data that would reveal a less than favorable picture, hoping it changes in the meantime.
Canada’s student permit boom may be coming to an end as Indian students pull back. Applications from India dropped 12% to 21,161 applications in August. Students from the country represented nearly half of all applications last year. As a consequence of their withdrawal, the country’s monthly applications are now showing negative annual growth. If this trend persists, Canada may see fewer students from abroad apply in 2023 than last year.
Statistics Canada recently released data that showed a sharp decline in the number of business openings in July. This is the slowest pace since the start of the pandemic and indicates a lack of opportunity for entrepreneurs in Canada. A combination of higher interest rates and a lack of household demand are definite factors contributing to a less-than-ideal entrepreneur environment.
Toronto Real Estate
Greater Toronto real estate prices are dropping once again, as inventory outpaces sales. The price of a typical home across the region fell by another $20,000 in October, leaving prices just slightly higher than last year. The market is now firmly in buyer’s territory, and without a sudden surge of buyers—prices are expected to fall even further.