Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canadian GDP Rises On Gov Spending, Big Revisions To Slow Rate Cuts: BMO
Canada’s economy is growing faster than anticipated, which may lead to higher rates. Real GDP showed annualized growth of 1.2% in Q3, slightly below expectations. However, the report came with massive revisions to previous quarters—big enough to close the perceived output gap. The miscalculation means the economy will see inflation correct in a few weeks too. Economists at BMO see the revisions shrinking rate cut expectations, as the Bank of Canada is more likely to be cautious when factoring in this data.
Canada Expects Up To 1 In 10 People To Voluntarily Leave By Next Year
Canada abruptly changed course on its immigration plan and that’s left millions of people with questions. About 5 million people will see their visa expire next year—some will get another visa, some will renew, and others will continue with onward migration. When asked in Parliament what happens if people refuse to leave, a policymaker explained they’re expected to leave voluntarily. That’s long been the case, with the vast majority of people leaving when they fail to secure permanent residency. However, Canada doesn’t generally engage in proactive removal like the US. When people refuse to leave, it often leads to a prolonged fight, as notably demonstrated by many unsavory characters in recent history—from global crime bosses to NAZI war criminals.
Canadian Mortgage Rates To Rise, Housing Unaffordable Until 2035: Oxford Econ
Canada rapidly slashed rates to prevent a mortgage cliff but it wasn’t a free ride. A new analysis from Oxford Economics sees mortgage affordability only slightly improving in the coming months. When combined with new government stimulus and increased leverage, inflation is expected to move higher, with borrowing costs to follow. The short-term relief will produce long-term consequences according to the firm, which doesn’t see affordability returning until 2035 at the earliest. For those looking to purchase in Toronto or Vancouver, they don’t see affordability returning anytime in the near future.
Canadian New Home Prices Made The Biggest Drop Since 2009
Canadian new home prices just made the sharpest drop since the Great Recession. Stat Can estimates prices fell 0.4% in October, the sharpest monthly drop since 2009. Toronto and Vancouver represent a disproportionate amount of the index, so weak demand in those markets were mainly behind the plunge. Considering the new housing market is so heavily investor-driven, this trend may just be starting as the country seeks to reduce its population next year.
Toronto New Home Prices Down More Than 30%, Condo Sales Down 91%
Demand for new homes in Greater Toronto has become almost nonexistent. Altus Group data shows condo sales were down 91% in October, joining the weak demand for single-family homes. It’s not unexpected since investors represent over 70% of the region’s markets. With negative cash flow, rising rental vacancies, and a population set to shrink next year, investors are hesitant about jumping into the market until a little more clarity appears.
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