Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada Needs To Prepare For Bank Runs & Collapses, Warns Former Regulator
Canadian banks are world-renowned for their stability. The last bank failure hasn’t occurred since 1996, meaning a whole generation hasn’t seen one. That’s exactly why they should be preparing for one, according to a former Canadian bank regulator. In a new report, they note that certain reforms should be made while things are good to further protect depositors. This warning comes after a number of global financial institutions once believed to be invincible have suddenly collapsed. There’s also more signs in the country than the public is currently aware of.
Canadian Household Income Inequality Hits Widest Gap On Record: Stat Can
Canada’s gap between the rich and poor has never been bigger, and it’s worsening at an alarming rate. That was the takeaway from Statistics Canada (Stat Can) data, showing the country went from a record low to record high within 4 years. Record income inequality is just one part of this issue—the rate at which it’s occurring means things are likely to get even worse.
Canadian Taxpayers To Back Turning “Basements or Garages” Into Rentals
Canadian taxpayers will soon back risky renovation loans to turn “basements or garages” into rentals. Earlier this week, the Government of Canada (GoC) announced it will support high ratio insured mortgages for homeowners looking to add a rental suite. The loans will apply to homes up to $2 million in value and allow mortgage borrowers to withdraw up to 90% of their home equity to conduct the renovation. Homeowners taking out state-supported high leverage loans at a time where experienced developers are struggling to break even. What can go wrong? 2006 called and wants its disastrous scheme back.
Canadian Real Estate Downtrend Extended By Rising Inventory: RBC
Canadian real estate extended its downturn as weak demand continues. Existing home sales climbed slightly off of lows, while inventory continued to climb at an unusually rapid pace. As a result, home prices fell further as sellers are in a bigger rush than buyers at the moment. RBC sees a more balanced market sometime next year, but the right combination of lower rates and lower home prices needs to be achieved first.
Canadian Population Growth Slowing Unlikely To Impact Economy: BMO
Canadian population growth is starting to slow, and it’s sparking fears of slow economic growth. Those fears are overblown, according to a new report from BMO Capital Markets. Looking at historical evidence they didn’t just discover a lack of connection, but they observed the inverse relationship. That is, the economy slows as the population picks up and vice versa. BMO emphasizes that correlation doesn’t equal causation, but there’s no actual proof these trends are as closely connected as many believe.
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