Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Ontario is seeing residents flee in record numbers these days. Nearly 125,000 Ontario residents left for new provinces in the year-ending Q2 2022, up 54.7% and a new record. Adjusting for the net of people that arrived from other provinces, the province still lost 47,200 more people than it gained — the worst loss since the ’80s. Immigration can obfuscate the issue temporarily, but eventually immigrants move to where the opportunity is, and that’s elsewhere according to residents.
Canada’s new construction homes are largely bought by investors, according to recent Census data. The share of homes constructed from 2016 to 2021 occupied by renters hit 40.4% in the 2021 Census, the largest share since the 1960s. The difference is back in the 60s, those units were largely purpose built rentals with much more affordable rents. Today those units are essentially just tenants paying off someone else’s larger mortgage.
Over a quarter of homeowners in Canadian cities are living in “shelter poverty,” spending more than 30% of their income on housing costs. Over 26% of homeowners in cities are in shelter poverty, according to the latest numbers. As you might expect, it’s even higher in Toronto (36.2%), Vancouver (33.4%), and Montreal (30.9%). Considering some mortgages are up to 25 years old, that’s a really high share of owners.
Canadian mortgage debt is still growing, but it’s slowing down towards more historical levels. The balance of outstanding credit hit $2.04 trillion in July, up 9.3% ($174.7 billion) larger than it was a year ago. It’s finally down from double-digit growth, but prior to 2020 — this level of growth hadn’t been seen since 2009. Growth is slowing, but it hasn’t been long enough for interest rates to work their magic.
Ontario is seeing its young adults flee for other provinces in record numbers. The net outflow of people between the ages of 18 and 24 years old reached 13,900 people in Q2 2022. Where are they going? The biggest destinations were Alberta (+4,700) which saw the biggest net inflow from Ontario. Nova Scotia (+4,000) and New Brunswick (+2,400) weren’t too far behind.