Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Vancouver Laundering Model That Inflated Home Prices Moves To Toronto
Greater Toronto is increasingly showing signs a money laundering technique known as the “Vancouver Model” has moved there. A casino was hit with an $80k anti-money laundering fine after a patron flagged as “high risk” turned a grocery bag with $80k into casino chips, left without playing, and encountered none of the required regulatory checks. A similar circumstance kicked off an anti-money laundering investigation in Vancouver, and found launderers had been exploiting casinos, obtaining the winnings, and then purchasing homes—helping to inflate prices. Considering a Canadian intelligence agency warned that gangs were doing that in Ontario, the problem is likely much deeper than just the one patron.
Canada’s GDP Shows Robust Growth, Potentially Delaying Rate Cuts: BMO
Canada’s economy is growing faster than anyone expected. GDP was expected to contract in the final quarter of 2023, but it showed moderate growth. BMO believes if correct, and they stressed “if” due to frequent revisions, this could delay rate cuts. Great news for the economy, not so much for real estate developers.
Toronto Real Estate Developers Have Never Had More Unsold Condos
Greater Toronto real estate developers have never had more unsold new condo inventory. New construction sales have generally been slow, with condos falling to the lowest level since the Great Recession. Slow sales are following a building boom that’s left over 22,000 units unsold. Despite estimates of a surging regional population and rising rents, no one wants to buy the units.
Canadian Mortgage Credit Experiences Slowest Growth Since 2001
Canadian real estate might have picked up recently but not to the extent many believe. Outstanding mortgage credit growth has come to an almost halt, despite a small uptick in purchases. The rate of growth is now the slowest since 2001, back when Canada was sandwiched between the Dot Com Bubble bust and a global oil recession. That’s not great news, especially considering the population is supposedly growing at a breakneck speed.
Canadian Real Estate Markets To See Rising Sales But Lower Prices: RBC
Canada’s largest bank is forecasting more home sales, but not rising prices. RBC is forecasting residential resales will recover and get a boost from lower rates in the second half of the year. However, more inventory and stretched affordability make it difficult for them to see prices climbing anytime soon.
Teaches the builders a lesson on greed. They’re asking too much and were ripping people off all across the gta. Even with houses.