Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canadian Household Debt Grew 2x Faster Than 2019, Driven By Mortgages
Canadian households may have trade jitters, but that isn’t stopping them from borrowing. Household debt climbed 0.2% (+$6.2 billion) to reach $3.04 trillion in February—double 2019’s growth rate. Mortgage credit drove 84% of the month’s increase, indicating refinancing and new housing are making up for the lack of existing home sales. While slower than the zero-rate frenzy, credit expansion is moving with pre-pandemic norms.
Canadian Real Estate Prices Slip Sharply, Further Downward Pressure Builds
Canadian real estate prices fell further, with downward pressure intensifying. CREA’s benchmark price dropped 0.7% (-$4,800) to $701,900 in April—now 3.6% lower than last year. Since 2022’s peak, buyers have rejected higher prices at lower cycle highs—a sign that prices remain too high for a healthy market.
Canadian Real Estate Prices Climb The Most In 9 Months: Brookfield’s RPS
While CREA reported falling prices, Brookfield’s RPS (used by lenders) shows a 1.1% April gain—the largest in 9 months. Lenders see higher values for mortgage lending, but real estate boards, buyers, and sellers are seeing prices fall. What can go wrong?
Canadian Job Market Diverges From US, Weak Loonie Usually Follows: BMO
Canada’s labor market is diverging from the US at a 25-year extreme, with unemployment now 1.7 points higher. BMO warns such gaps historically precede loonie depreciation, as the Bank of Canada (BoC) addresses slower consumption and falling inflation. This risk is amplified by Canada’s unaddressed productivity, which ironically would worsen as non-productive credit growth is incentivized.
Canadian Mortgage Rate Renewal Cliff Was More Like A Curb
The Bank of Canada’s feared “mortgage renewal cliff” proved more like a curb: payments rose just 10%—33% less than forecast. With easing already priced in, BMO warns further relief would require a much more serious downturn. That might make mortgage debt cheaper, but comes with a whole other set of problems that would need to be addressed.
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