This Week’s Top Stories: Canadian Mortgage Rates To Rise, & Toronto Job Market Amongst Worst In Canada

Time for your cheat sheet on this week’s top stories.

Canadian Real Estate

Canada’s Top Job Market Is Saskatoon, Toronto Ranks Near Worst: BMO

Canada’s biggest city is its top destination for economic migrants, but it’s one of the worst places to actually find a job. BMO Capital Markets released its annual rank of the country’s 33 largest cities by labor market, comparing how jobs have kept up with population growth. Despite Toronto being Canada’s financial capital, it now has the second-highest unemployment rate and plunged in rank near the bottom of the list—in 27th place, falling behind cities like Sudbury. On the flip side of the list were affordable cities like Saskatoon, and Victoria. 

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Canadian Seniors More Likely To Have A Mortgage Than Young Adults

New data from the Bank of Canada (BoC) reveals that seniors are more likely to have a mortgage than young adults. In 2024, only 12% of mortgage borrowers are under 35, compared to 14% by those 65 and over. This occurred despite the 20-34-year-old population being slightly larger than the country’s senior population, but it wasn’t always this way. Nearly 23% of mortgages were obtained when the borrower was under 35, implying this generation of young adults is less than half as likely as previous generations to own a home before turning 35. While it may not seem like much of an issue, this can have a big shift on natural demographics as younger adults delay home purchasing and become a source of income for older households. 

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Canada To Enforce Capital Gains Change, Hides Pandemic-Sized Deficit

Canada plans to enforce its new capital gains rules despite Parliament being prorogued. The new changes would see the capital gains inclusion rate rise from 50% to 66.7% for corporations and households with a gain of more than $250k in a single year. When Parliament resumes after being prorogued, all legislation tabled is considered abandoned, which includes these changes. However, enforcement of a tax begins when the notice is tabled, and the Department of Finance confirmed by email that they will be collecting it. It’s an odd move considering the high probability of the legislation failing and the funds getting rebated. Though accepting that the funds won’t be collected would involve admitting the deficit is close to the record hit during the pandemic. 

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Canadian Borrowers To Feel Bank of Canada’s QT In 2025: NBF

Quantitative tightening (QT) hasn’t been discussed much, but borrowers are set to feel it soon. National Bank of Canada (NBF) warns that the unwinding of quantitative ease (QE) has had a minimal impact on borrowing costs. That will change in 2025, as the government’s settlement accounts return to historic levels and liquidity normalizes. The result will be higher borrowing costs as policymakers try to unwind as much of QE as possible to prepare for the next economic downturn. 

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Toronto Real Estate

Toronto Real Estate Fizzles Out With 2nd Worst December In Over 10 Years

Toronto real estate’s big November set expectations for a market boom kicking off. That wasn’t the case in December, as anticipation of rate cuts had caused more enthusiasm than the actual rate cuts themselves. Home prices haven’t moved much, but sales were amongst the weakest for the month on record, while inventory came in at one of the highest levels. A combination that’s good news for buyers, but less-than-ideal for sellers. 

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Vancouver Real Estate

Vancouver Real Estate Sales Rise, Inventory Much Higher Than Usual

Greater Vancouver real estate sales popped much higher, but are historically weak. Annual growth of sales climbed to 31% in December, but last year was one of the worst months on record. The result is sales remained 14% below the 10-year average for the month. At the same time, inventory remains lofty, with active listings at 24.4% higher than the 10-year average. Historically weak sales is bad news for sellers, but historically high inventory is good news for prospective buyers. 

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