Wednesday, 12 August, 2020

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Author: Stephen Punwasi


One of the driving forces behind Canadian real estate prices is on hold – immigration. Government of Canada (GoC) data shows the number of newly admitted permanent residents to Canada is still making sharp declines in June. The decline was mostly consistent around the country, except in BC and Quebec. The former is seeing a smaller than average decline, and Read more…


The unemployment shock from the pandemic is still working its way around the country. Government of Canada (GoC) data shows Canada Emergency Response Benefit (CERB), the unemployment benefit sparked by widespread workplace closures due to the pandemic, is seeing new applications slow in growth as of the week of August 2. The economy is starting to recover, but unemployment is Read more…


Canadian real estate buyers pay steep premiums to own, compared to their global peers. IMF research shows Canada’s house price-to-rent ratio, the difference between renting and buying, is one of the highest in the world. Owning a home in Canada more closely resembles ratios in countries like Latvia and Slovak Republic, than countries like the US and Australia. House Price-To-Rent Read more…


Canadian real estate buyers were excitedly disregarding risk before the pandemic hit. The US Federal Reserve Bank of Dallas (Dallas Reserve) exuberance index shows expectations surged in Q1 2020. The index is designed to capture explosive price growth, detached from fundamentals. A single quarter isn’t enough to say the market is bound for further detachment, but it does show buyers Read more…


Canada’s central bank is desperately trying to prop up real estate markets with liquidity. Bank of Canada (BoC) has been injecting billions into Canada Mortgage Bonds (CMBs). The central bank began purchasing a few million worth of bonds during last year’s real estate slow down. As the pandemic hit, the BoC began buying hundreds of millions worth of CMBs per Read more…


Canadians with supersized mortgages are requesting payment relief at a much higher rate than across the border. Both the US and Canada worked with banks to offer mortgage payment deferrals since March. Both countries launched their programs and had a sharp initial uptake at the same time. The rate of US mortgage deferrals have since peaked in June, and are Read more…


Canadian real estate is seeing another demand side factor disappear – international students. Immigration, Refugees and Citizenship Canada (IRCC) data shows international student permit holders admitted, made a sharp decline in Q2 2020. The decline will continue into the fall, or drop further, as the government warns students may not be admitted due to the pandemic. Canada typically has hundreds Read more…


Canada’s largest real estate markets have seen a dramatic slowdown since the onset of the pandemic. Immigration, Refugees and Citizenship Canada (IRCC) data shows the number of permanent residents made a sharp decline in May. While Toronto and Vancouver can attribute this trend to the pandemic, it’s been a more long-term issue for Montreal. Toronto Immigration Drops Over 69% The Read more…


Millions of Canadians are still on the government’s emergency income benefit. Government of Canada (GoC) data shows a small drop in users of the Canada Emergency Response Benefit (CERB) by July 5th. Though there was a drop, about one in five Canadians are still using the benefit. Here’s how these numbers break down per province. CERB Benefit Users Drop Slightly Read more…


Canadians know real estate prices have grown very quickly, but most likely have no idea how fast. US Federal Reserve data shows when US home prices took a dive during the Great Recession, Canadian prices didn’t. Instead, Canada has flooded the market with a number of policies designed to increase the amount of debt households can carry. Consequently, Canadian home Read more…


Canada’s first-time buyers may be in for some volatility, and they don’t even know it yet. Earlier this year, the Canada Mortgage and Housing Corporation (CMHC) warned first-time buyers that leaving just a 5% downpayment could be problematic. If the market had a sudden sharp turn, they could suddenly see their downpayment wiped out in a matter of weeks. This Read more…


Canadian households began to sock away a little extra cash before the pandemic. Statistics Canada (Stat Can) data shows the household savings rate reached a 20 year high in Q1 2020. The rate had been growing steadily since 2018, as households diverted their spending to savings. Here’s what it means. Household Savings Rate The household savings rate is the rate Read more…


Canada’s state-owned mortgage insurer sees prices dropping in major real estate markets. The Canada Mortgage and Housing Corporation (CMHC), is forecasting price declines across Canada. This week they provided additional data, showing the expected impact to major markets. The agency sees Toronto and Vancouver falling from last month’s prices, even in a best case. As for Montreal, they see much Read more…


Canada’s wealth inequality issues are bigger than previously estimated – which really is something. The Parliamentary Budget Officer (PBO), a non-partisan office that advises the Canadian government, has created a new model to estimate wealth held by the country’s richest households. The new estimate shows Canada’s one-percent actually holds a much bigger share of total wealth than previously thought. On Read more…


Canada’s largest bank is calling the top for real estate prices in the near term. RBC economists took a dive through the latest Canadian real estate sales for May 2020. In addition to noting prices have stalled, they believe the bounce in sales is overstated. Combine this with an observation on supply outpacing demand, and their forecast is beginning to Read more…