Top Stories

This Week’s Top Stories: Canadians Are Back To Pumping Massive Amounts Into Real Estate, While Incomes Stall

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

Canadian Real Estate

Canadian Real Estate Grows Almost 5x GDP, Economy Hits Record High Dependency
Canada’s FIRE industry is growing much faster than the general economy. GDP reached $1.98 trillion in Q4 at annual rates, up 1.6% from the previous quarter. Finance, insurance, and real estate (FIRE) reached $386.73 billion in Q4, up 2.9% from a year before. FIRE is now 19.53% of GDP, blowing past the previous high in Q2 2016, and is now at the highest rate in at least a few decades.
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Canadian Mortgage Lending Just Had One Of The Biggest Months Ever
Canadians are jumping back into real estate, and new mortgage lending is booming again. Borrowers took out $37.94 billion in mortgage debt in November, up 20.79% from last year. The dollar amount is the highest for the month in at least 7 years of data. It’s also twice the amount borrowed just five years ago.
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Canadian Residential Investment Is Seeing Growth Accelerate
Canadian residential building investment was accelerating at year end. There was $8.19 billion pumped into residential investment in December, up 9.98% compared to a year before. That pushed the total invested to $97.01 billion in the 12-months ending in December, up 3.77% from a year before. This is unusually large growth for a month that is typically slower.
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Toronto And Vancouver Incomes Decline, While Canada Is “Virtually Unchanged”
Canadian households are seeing a few extra bucks in their pocket, but not enough to move the needle. The median after-tax income of Canadian families and unattached individuals reached $61,400 in 2018. This is a 0.82% increase compared to the year before, which Stat Can called “virtually unchanged.” The increase is substantially lower than the one seen in 2017 – the highest since 2001. Real estate rich regions like Toronto and Vancouver reported a decline in median income.
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Toronto Real Estate

Toronto New House Prices Fall, But Condos Rip To A New All-Time High
Greater Toronto new home prices are split on where to head, but sales are ripping higher. The benchmark, a.k.a. the typical price of a single-family home reached $1,097,613 in January, down 2.9% from a year before. The condo apartment benchmark reached $925,209, up 15.1% from a year ago. Single-family prices are still over 10% lower than the peak reached in 2017. Condo apartment prices pushed a new record high, after going parabolic in October.

Despite the split, new home sales in the region came in at 2,106 units in January, up 65% from a year before. Last year was unusually slow, which explains the massive growth print. Don’t dismiss the growth entirely due to that though. Sales are still up 14% above the 10-year average.
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