Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada’s real estate correction might be over less than a year after kicking off. BMO observed home buyers returned to the market shortly after the central bank “paused” hikes. At the same time, rising prices and more buying has led to a pullback in new listings. A sharp increase in the sales to new listings ratio indicates a near-term increase for prices.
Canadians are falling behind on their credit payments, and it’s expected to get worse. That was the message from RBC, Canada’s largest bank. They found all credit delinquencies climbed, with mortgages being the exception. However, housing isn’t immune—they see mortgage accounts eroding over the next few years, as the economy slows and unemployment climbs.
Canada’s two largest real estate markets reported higher home prices last month. Toronto and Vancouver both saw the price of a typical home rise 2.4% in the month. It’s not a coincidence that home prices in both cities increased a similar amount to mortgage leverage from falling interest costs.
Canadian business insolvencies climbed sharply, even for construction and real estate industries. Business insolvencies climbed 36% in February, returning the volume to pre-pandemic levels. Even booming industries like housing are starting to show weakness, and experts see it getting worse in the near-term.
Canada’s population is on track to smash last year’s record with immigration accelerating. There were 49.5k permanent residents admitted in February, a 33% increase from last year. An increase this sharp might not be providing the desired economic boom expected. GDP is still slowing, as non-productive shelter costs reduce consumption.