Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canadian Bank Regulator Sees Mortgage Defaults Rising, 1 In 7 Of Concern
Canada’s bank regulator is warning that mortgage debt is one of the biggest risks to the country. OSFI released its annual risk outlook and mortgage credit was one of the top 4 biggest threats to the financial system. In particular, the large sums people have borrowed and the potential for those sums to become more burdensome at rate renewal. Roughly 1 in 7 dollars of outstanding mortgage credit is vulnerable to substantial payment shock.
Canadians Fleeing Toronto & Vancouver Accelerated To A Record Pace: BMO
Flight from Canada’s big cities was supposed to be a temporary issue during the pandemic. That’s not the case according to the latest interprovincial migration data, which shows the flight from Toronto, Vancouver, and Montreal have accelerated. BMO believes the trend was expected and started before the pandemic. A lack of affordability accelerate the move though, and combined with more work places embracing remote work, the country’s biggest economies will see a rapid shift—not necessarily a good one.
Canadian Renters Have Relief On The Horizon As Rents Slow: BMO
Canadian renters may finally be able to sigh in relief. The latest inflation data shows CPI shelter slowed down, notably the rent sub component. While still robust, shorter-term trends show the growth rate is hitting a wall. BMO believes the trend is driven by an increase in rental vacancies, as well as lower expectations when it comes to future growth as immigration moderates.
Canada Thinks 1 In 5 Households Are The One Percent
In an effort to build support for increased capital gains, the ruling party in Canada has released a number of data points. Unfortunately, most of them seem to be completely off and not based in any reality. The latest bunk data comes from a chart used in a video featuring the Prime Minister of Canada, featuring the incorrect net worth for the top fifth of households. It appears policymakers mistakenly used the aggregate wealth of the top 20% of households, not understanding the data was supposed to be multiplied by 1,000,000. This comes after incorrectly stating the share of people impacted by the tax changes was a tenth of the number of people impacted. The best case scenario here is they understood the data so poorly, the tax is unlikely to have the impact stated.
