Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada’s Plan To Fix Housing? Just Change What Affordable Means
Back in 2023, the CMHC said that building 3.5 million homes could restore 2004 levels of affordability by 2030. It reiterated the plan a year later, right before the country’s population growth plunged to nearly zero. Combined with the building boom, the bar should have been lower to achieve this goal by 2030. However, the agency’s latest report ignores its previous statement, moving the goalposts. The CMHC now expects affordability will be restored to 2019 levels if roughly 4.4 million homes are built by 2036. If you’re skeptical of the agency’s math, you should be. Here’s a brief overview of why.
Canadian Mortgage Rate Relief Done For This Stage of The Cycle: BMO
One of Canada’s largest banks doesn’t see much relief when it comes to mortgages in the near future. BMO Capital Markets warned the market is now pricing in five rate hikes from the Bank of Canada by the end of 2027. While BMO thinks that may be excessive based on its current read, rate hikes are coming. Mortgages are at cycle low, with hikes expected to throttle home sales in the coming weeks.
Canadian Real Estate Prices Fall, Demand Balance Hits 29-Year Low
The price of a typical home across Canada fell 0.7% to $657,500 in August, marking the third straight monthly drop. The drop was expected with sticky inventory and home sales falling 6.9% to the weakest August since 2012. The combination pushed the demand balance to its lowest level in 29 years. Canada’s housing recovery has barely started, and it’s already facing headwinds.
Canadian Inflation Stalled at 3%, But It’s Higher In All But Two Provinces
The Bank of Canada was lucky enough to see annual growth of CPI stall at 3.0% in August, but most Canadians aren’t that lucky. Only two provinces reported CPI growth at or below 3.0%: BC (+3.0%) and Ontario (+2.4%). Everywhere else came in much higher, especially in Atlantic Canada. The highest price growth was in Nova Scotia (+5.1%), where prices are rising at more than twice the Bank of Canada’s 2.0% target rate.
