Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada To Lift Ban On Foreign Buyers of New Homes For “Affordability”
Canada’s Budget 2026 will extend the foreign buyer home ban but exempt new homes. Billions in taxpayer back incentives were used to create supply with the narrative of bringing prices lower. Now that developers are sitting on near record inventory that’s still out of reach for local incomes, the plan has changed. Policymakers argue demand from non-residents will boost affordability by helping to create new supply. The problem? The ban was extended because non-resident speculators were flooding into new homes in the first place.
Canadian Unemployment Climbs, Nearly 1 in 3 Struggle To Buy Necessities
Headline employment data looked largely unchanged but the devil was in the details. Statistics Canada (StatCan) reported jobs were relatively unchanged in October. Unemployment still climbed 0.2 points to 6.7% though, as more people sought work. The worst news was in a special supplement that revealed almost 1 in 3 struggle to pay for necessities, rolling back improvements made since 2022. The headline may show little change in jobs, but the details show more unemployment for longer terms, and less financial security.
The Data Center Boom: Internet Landlords & A $3 Trillion Real Estate Bubble
Investors in both Canada and the US are planning a lot of data centers. The rising and revolutionary use of AI means more will be needed, but just how many? Crunching the numbers reveals that just 1 in 5 data centers announced have actual progress. Investors and the politicians they’ve elected are blaming an energy shortage, but we found most haven’t applied for a utilities hookup. We take a deep dive into the multi-trillion speculative data center real estate bubble and the tax changes that have them vying to become landlords of the internet.
Canadian Banks Brace For Mortgage Losses, 3x Pre-Pandemic Share
Banks are bracing themselves for the fallout from Canada’s real estate bubble popping. The bank’s median allowance for mortgage losses has climbed 138.1% over the past 4 years, tripling since Q2 2019. The top 25% of banks preparing for losses has set aside nearly double the median, and the most since 2015. While economists at many banks are saying the bottom is near, their risk departments are preparing for it to worsen in the near-term.
Toronto Real Estate
Toronto Real Estate Prices Have Dropped Over $360k Since Peak
The price of a typical home in Greater Toronto slipped 0.1% to $915,400 in October. Losses extended further as weak sales and lofty inventory combined to create further downward pressure. This likely surprises many, as prices have already trimmed 28.4% (-$363k) from the 2022 peak. However, the supply balance suggests things may get worse before they improve.
Vancouver Real Estate
Vancouver Real Estate Prices Slip, Just 3% Higher Than 2017 Peak
The price of a home across Greater Vancouver fell 0.7% to $1.07 million in October, 5.2% lower than last year. Weak sales and lofty inventory has pushed the region out of stagnation and into a second-leg of a correction. How low can prices go? It’s not clear, but it’s worth noting that at this level, the price of a typical home is only 3% higher than it was at the 2017 peak. Nearly a decade of stagnation and the market’s indicators are slanted towards further declines.
