Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canadian Real Estate Prices Fall To 4-Year Low As Inventory Sets Record
Canadian real estate prices continue to cool after the pandemic-era boom. A typical home fell to $679,900 in October, a 20.2% (-$171,700) drop from the March 2022 peak. The drop came amid falling sales and the highest October inventory on record. Despite easing borrowing costs, the weakening demand balance continues to apply downward pressure on prices.
Canadians Tap HELOC Debt At The Fastest Rate Since 2012
Canadian HELOC debt is rising at an unusually fast pace. Balances climbed 0.7% (+$1.28 billion) in September to $178.92 billion—the highest since March 2020. That’s a 4.2% increase from last year, and the fastest annual growth since December 2012. What’s behind the surge isn’t exactly clear, but it comes alongside flat retail sales and a wave of investment property completions. The latter raises the risk of a leverage issue worth watching.
Canadian Housing Starts Drop 46k Homes In Just One Month
Canadian housing starts plummeted in October, but BMO sees no reason for alarm. The seasonally adjusted annual rate (SAAR) fell 17% (-46,000 units) to 232,800 housing starts. BMO economists noted the drop won’t impact supply in the near term, with nearly 360,000 units under construction—twice the volume a decade ago. A wave of completions is set to hit the market, adding to already record resale inventory, further tempering expectations.
Canadian Household Debt Surges—But It Wasn’t Due To Mortgages
Canadian household debt rose 0.5% (+$14.8 billion) to $3.14 trillion in September, the fastest growth for the month since 2021. Mortgage debt, which represents 74% of the total, accounted for just 55% of the monthly increase—an unusually low share. Most of the growth came from consumer credit, such as credit cards and lines of credit. The shift suggests households are relying more on short-term credit to manage expenses—potentially increasing their vulnerability to shocks.
Canada’s Retail Sales Fell, But It Was Mostly One Category
Canadian retail sales slipped, but the headline data looks worse than reality. Sales fell 0.7% to $69.8 billion in September, driven entirely by a 2.9% drop in motor vehicle and parts. Core retail—excluding gas and motor vehicle & parts dealers—was flat, signalling general stability. The real issue is volume: inflation-adjusted sales have risen less than 1% since the 2021 peak, despite the population growing by over 3 million.
Canadian Inflation Remains Sticky, Homeowners & Renters See Costs Soar
Canadian headline inflation slowed to 2.2% in October, entirely due to falling gas prices. CPI excluding gasoline held steady at 2.6%, unchanged from the month before. The biggest driver? Property taxes (+5.6%)—nearly three times the Bank of Canada’s target. Shelter costs also accelerated, with rents up 5.2% and mortgage interest up 2.9%. That’s a lot of gas to offset those rising shelter costs.
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