Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada Just Saw 1 In 20 Businesses Close In A Month, Biggest Wave Since Pandemic
Canadian small businesses are struggling to stay above water these days. Roughly 1 in 20 businesses shuttered their doors in June, the largest wave since the pandemic. The closures, over 42k in the month, impacted virtually all industries and is extremely bad news considering the rising unemployment rate.
Ontario’s Big Cities Saw Investors Buy Up To 85% of Condos, Fueled By Gov Incentives
Ontario real estate investors dominate the condo market, a trend partially fueled by government incentives. New Statistics Canada (Stat Can) data shows that 43.5% of condos in the province are investor owned. In the ten largest census metropolitan areas (CMAs), the concentration is even higher—rising up to 85% of condos in one city. According to the agency, this trend is partially fueled by the rise of large investors purchasing or developing whole condo buildings and operating them as rental apartments, incentivized by government tax breaks.
Canada’s International Student Boom Was A $148M Government Campaign
Canada’s sudden surge of international students wasn’t an accident, but a part of a $148 million plan. Heck, they even started a new brand to do it—EduCanada, which is jointly owned by Federal, Provincial, and Territorial goverments. Despite several levels of governments acting suprised by the growth, it was actually a concentrated effort and collaboration between policymakers. While it appears they’re now pulling back due to concerns from the public, this year is the end date for the original strategy. Convenient, eh?
Toronto Real Estate Inventory Surges, Now Deeper Into Bear Market
Toronto real estate saw further erosion last month, as inventory continued to surge. Prices slipped for a fifth consecutive month, as new listings outpaced the growth of buyers. A sales to new listings ratio (SNLR) of 40% or less is considered a buyer’s market, where prices are expected to fall if the demand balance remains. According to the local real estate board data, the SNLR fell to 28% in September—placing the market firmly in bear market territory.
Canadian Consumer Insolvencies Just Saw The 2nd Biggest Month Ever
Canadian consumer insolvencies continue to rise after a brief pause over the past few years. The OSB received 11,388 consumer insolvency filings in August, an increase of 8.9% from last year. This was the second biggest August on record, only beaten by the Great Recession surge back in 2009. It’s a trend that’s only become stronger over the past year, with insolvencies now at levels never before seen outside of recession.
The Toronto Real Estate Bubble Is So Big It Breaks The UBS Index
Toronto has once again landed near the top of the UBS Real Estate Bubble index. Toronto ranked as the 5th largest bubble in the world, but its risk score fell in some categories. This is due to the methodology used, which blends national data with local data—an assumption that the two move together. That isn’t quite the case, especially when it comes to mortgage quality where Toronto is eroding much faster than the national trend.
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