Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada’s Housing Crash Rivals US In 2008, But The Pain Is Hidden: BMO
The Canadian housing crash now rivals the US in 2008, with prices falling for nearly 5 years. However, unlike the US crash, Canada’s economy appears to have avoided most of the negatives. The country’s economy grew 1.7% annually over the four years, helped by stronger borrowers and rate cuts. Strong headline data is hiding the true impact, warns BMO Capital Markets. That strong GDP growth is actually negative when adjusted per capita. Meanwhile, resilient consumption is due to a reliance on seniors, who aren’t impacted by a rise in unemployment so sharp it’s rarely seen outside of recessions. The economy is in turmoil, the optics are just focused on the wrong areas.
Canadian Real Estate Spent 5 Years Wiping Out Just 13 Months of Gains
Canadian home prices fell 0.9% (-$5.7k) to $651,400 in September, 22.5% (-$189k) lower than the March 2022 peak. Home prices are now down to February 2021 levels, a timeline worth some attention. The painful market correction that’s lasted almost 5 years has only managed to wipe out 13 months of gains. Historically weak sales and near-record high inventory suggest the downturn isn’t over.
Canadian Bond Yields & Borrowing Rates To Rise With US Inflation: BMO
Borrowing in Canada is set to get more expensive due to rising US inflation. Canada’s 2-year government bond yield rose to 3.25% this week, and the Bank of Canada is expected to hike 1 point by 2027. Yields were driven by higher gas prices, but continued to climb even after gas prices stopped. BMO warns Canada’s yields are rising due to US inflation, despite domestic weaknesses.
Canadians Plan To Buy First Home At 41, Property Ladder Breaks: RBC
Canadians plan to enter the housing market at a much later age in life than past generations. A new survey from RBC found the average first-time buyer plans to buy at 41 years old, 12 years later than usual. Being older with higher incomes, they plan to skip starters and want a long-term purchase. At the same time, nearly half of the owners who want to upgrade can’t actually afford to in this market. This combination can mean the end of the property ladder, and a big change for the real estate industry.
Just consider the data not
Provided by the co do authority or similar across Canada mmah or cmhc and what this bodies don’t gather when they assess housing affordability which in the condo context and it’s automatic liens should include security of being able to afford to keep one’s home.
Or consider when a
Condo hcc “modernizes” its building or infrastructure is it referencing to i frastructure that has evolved or is it simply replacing same for same because for example the condo act of Ontarios section 97 encourages this
Building g new doesn’t address this not sooner issue but I facts adds maintenance the a labour cost pressures to the special assessment or maintenance fee this aside from earlier legislative gaps with even foggier contrition quidelines for reserve funds or the now finally mandated reserve fund studies that span thirty years not including the timeframes for the most costly infrastructure so valuable time to contribute is lost aside from cpi is not the same data as the Bcpi construction index
It is t as if governments couldn’t have used the experience of purpose built rental apartments to get a sense of future costs. So why the assumption the end user owner dwellers wallet even begins to be as deep as a corporate landlord or developers wallet ? To address this o e needs much better more complete data so why isnt this being f provided or requested ? Amd by all
Levels
Of government in a cooperative approach five. Our housing affordability crisis which should also include for the condo co text security of remaining g in o es home given the embedded automatic liens and how rapidly it works. Maybe our tax act needs to be updated for this type of housing while still retaining the primary residence tax shield ? Otherwise co dos as affordable housing including to retain ownership are doomed