Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada’s GDP Rises in Q1 2025—But Domestic Demand and Trade Flatline
Canadian real GDP climbed 0.5% in Q1, following similar growth in Q4 after a downward revision. At first glance, it appears the economy is on stable footing, but a dive into the details wasn’t encouraging: the terms of trade have turned negative, household spending is slowing, and domestic demand has turned flat. Exports propped up growth temporarily, but demand within the country is tapped out. Headline data appears more stable than the reality households face.
Toronto New Home Sales Crash 72% To A Record Low
Greater Toronto real estate woes continued into April with just 310 new homes sold—89% below the 10-year average. It was the worst month on record for new home sales in the region, helping inventory rise to 15 months of supply. New home prices have barely moved in contrast to the shift in both supply and demand, raising questions about a possible second wave correction.
Vacant Units & Algo Rents: Canadian Mega Landlords Drive Rents More Than Demand
Canada’s financial landlords may be driving rents higher than fundamental factors. A new study found that Toronto’s financial landlords, such as those owned by REITs or large funds, charge rents up to 44% higher than the neighbourhood averages. The firms also tend to cluster in marginalized communities traditionally known for affordable rents, to maximize returns. While all landlords are profit-driven to an extent, the sheer size of these firms means they’re capable of applying pressure similar only typically observed with oligopolies.
Canadian Consumer Insolvencies Only Surpassed By 2010 & 2020 Peaks
Canadian consumers made over 12k insolvency filings in March, pushing the 12-month total to 137,635 (year-over-year: +8%). This volume has only been seen twice before—early in the global financial crisis (2010), and preceding the pandemic (2020). If prior periods are any indication, this means the economic slowdown isn’t close to peaking—it’s just getting started.
Canadian Consumer Confidence At Record Low, TSX At Record High: BMO
Canadian consumer sentiment has plunged to generational lows, but the TSX is near all-time highs. What gives? That was the question from BMO economists, who found historical evidence that these two factors typically move together with few exceptions. The current environment is the largest divergence in decades. Ironically, the fears may turn into a self-fulfilling prophecy, as worried consumers cut back on spending.
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