This Week’s Top Stories: Canadians Sour On Immigration & Ownership Falls For Young Adults

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

Canadian Real Estate

Canadian Unemployment Rises, Immigrants Sold On Non-Existent Opportunities

The latest data for Canadian employment was better than expected—but analysts weren’t expecting good news. The economy added 22k jobs in November, which would be good news had the economy not added even more workers over the same period. This pushed the unemployment rate 0.1 points higher to 5.8%, the highest rate since the start of 2022. Stat Can additionally noted that most of the unemployment burden is falling on new immigrants, who despite being attracted by the promise of filling a skilled labor gap, can’t find employment relevant to their training. 

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Canadian Economy Narrowly Avoids Recession After Data Revision

Canada’s economy narrowly avoided the recession label, largely due to a data revision. Canada’s real GDP contracted 1.1% in Q3 2023, marking a sharp erosion in the economy. A traditional definition of recession includes two consecutive quarters of declining real GDP growth. This would have been the second had there not been a big upward revision to Q2 data. All of which begs the question—if the data is subject to such large revisions, does it provide a real snapshot of reality?

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Most Canadians Now Think Immigration Is Too High: Leger 

A new survey from Canadian Press and Leger shows households are souring on immigration. The majority believe Canada’s aggressive immigration strategy is admitting “too many” immigrants. An overwhelming majority believe it’s contributing to a housing crisis (75%), and tighter healthcare (73%). Although many respondents see the benefits of immigration, a large share feel the current levels are driving a net negative impact to the economy.

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Canadian Investors Look Abroad, Downside Risk To GDP: BMO

Canada attracted more international capital but not as much as it lost. Canadian Q3 2023 current accounts show foreign direct investment into the country reached $20.4 billion. At the same time, outbound investment reached $29.3 billion over the same period. A large amount of cash came into Canada, but companies invested even more abroad. The data reveals the country is failing to compete, leading banks like BMO to warn this presents downside risk to GDP data.

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Canadian Real Estate Prices To Fall Over The Next Year: Scotiabank

One of Canada’s largest banks doesn’t expect home prices to move much going forward. Scotiabank’s Q4 2023 earnings report includes their forecast for home prices falling 1.9% over the next year. They believe this will be followed with an average compound annual growth rate of 2.9% for the 4 years after. That would be a much slower move for home prices than most investors are used to. 

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Canadian Homeownership Rate Is Falling Sharply For Young Adults

Canada’s youngest generation may need to get used to renting. Data from the Canadian Housing Statistics Program (CHSP) shows the homeownership rate peaked 40 years ago. The drop was most pronounced for households aged 25-44, which has seen the rate drop 5 points since 2011. As credit gets easier, investors have been taking a larger share of the housing pie leaving first-time homebuyers out of luck. 

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