Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada Still Hasn’t Seen The Full Impact of BoC Rate Hikes: National Bank
The impact of the Bank of Canada (BoC) rate hikes have yet to be fully felt. That was the take from National Bank, one of Canada’s Big Six banks. A change in monetary policy requires 18 to 24 months to fully be reflected in the market. Since the first hike of this cycle was just 17 months ago, existing hikes will continue to impact the economy for months. According to the bank’s economists, they estimate 43% of the impact is still yet to come.
Politicians Ask Bank of Canada To Ease On Interest Rates But They Shouldn’t
Politicians are blaming the central bank’s rate hikes for inflation, but they’re grossly mistaken. The Bank of Canada (BoC) rate hikes are of particular concern when it comes to mortgage payments, often cited as a reason for worsening shelter affordability. We go through the basics of monetary policy, how long it takes to work, and the data points mistakenly cited to explain how higher rates contribute to an erosion of affordability. In reality, virtually all evidence points to low rates being the culprit of affordability woes.
Canada Can’t Double Housing Output. It Can’t Even Stop It From Dropping: BMO
BMO Capital Markets has been warning investors the narrative of doubling housing output makes little sense. The latest data point supporting their argument is construction investment, falling 27% lower than last year. New home construction has also made a drop, despite a population boom. After promising to double construction, the output has actually slowed down. That’s led the bank to quip, instead of doubling construction, perhaps they should focus on just preventing it from falling.
Bank of Canada Holds Rates But Hikes Inflation Outlook
The Bank of Canada held its overnight rate steady at 5.0%, as the market expected. Consumer spending and slow economic growth are just some of the reasons they cite for not hiking, but they have emphasized further hikes may be necessary. Considering the central bank also raised its inflation outlook, the possibility of that happening isn’t as far off as many think.
BC To Fast Track Immigrants To Fix Canada’s Real Estate Agent Shortage
BC is attempting to address a labor shortage in key industries—such as healthcare, finance, social services, and… real estate sales? Newly tabled legislation in the province looks to expedite credential recognition in the province to help areas with key shortages. Of the 29 careers that qualify, about a tenth have to do with real estate sales. Considering the province has an usually high number of registrants in the industry, it leaves many scratching their heads as to where this perceived shortage came from.
