ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
October 7, 2024 | Cheaper Mortgages?
Happy Monday Morning! I just got back from presenting at the annual Veritas Real Estate conference in Toronto. The conference, which caters towards investment professionals and financial institutions engaged in a healthy debate on the direction of our housing market. There was a lengthy discussion on interest rates, which is undoubtedly one of, if not the largest […]
September 30, 2024 | Free Markets
Happy Monday Morning! This newsletter isn’t all bad news. We finally got some good policy out of Ottawa this past week. OSFI, the banking regulator, announced it will finally remove the stress test for homeowners who wish to switch lenders at mortgage renewal time. Under previous guidelines, when the mortgage term ended and a borrower […]
September 23, 2024 | Fire in a Crowded Theatre
Happy Monday Morning! Last week I wrote a note titled ‘Connecting the Dots’ in which we highlighted the impending crisis brewing in the new construction market. New home sales are at 20 year lows in the GTA, and there’s nearly 10,000 unsold units in Greater Vancouver. People who bought pre-sale near the peak paid way […]
September 16, 2024 | Connecting the Dots
Happy Monday Morning! Today we’re going to play a game of connect the dots. As we already know, the resale condo market is weak, particularly in Vancouver and Toronto. Rates went up a lot, basically destroying the math behind owning rental properties in these two cities. Condo investors are suddenly faced with rising mortgage payments, […]
September 9, 2024 | Jobs, Not Rates
Happy Monday Morning! The Bank of Canada slashed rates again, the third time in this rate cutting cycle, and more cuts are coming. Markets are pricing in another 50bps of rate cuts by year end. Will this be enough to resuscitate the housing market back to life? The Real Estate industry certainly wants to belive […]
August 26, 2024 | Just a Hunch
Happy Monday Morning! For an overly indebted Canadian household sector grappling with rising interest payments, there was a lot to be pleased with this week. Canada’s CPI inflation came in at a breezy 2.5% in July. The deceleration was broad-based and marked the seventh consecutive month of headline rates running within the central bank’s target […]
August 19, 2024 | Keeping the Lights On
Happy Monday Morning! Big news on the housing supply front. Housing starts surprisingly rose to the highest level in more than a year. Construction was started on an annualized 279,509 units in July, according to CMHC. That’s the highest level since June 2023, and exceeded the 245,000 units expected by economists. Downturn? What downturn? Source: […]
August 12, 2024 | Slinging Mud
Happy Monday Morning! The cost of living and housing affordability remain the top areas of concern amongst Canadians, according to recent polling surveys. We’ve got an important provincial election this fall in BC, and the feds next year. If you’re a policy maker it’s time to look busy and that’s exactly what they’re doing- slinging mud […]
July 29, 2024 | Cash Flow Problems
Happy Monday Morning! As expected, the Bank of Canada slashed rates another 25bps this past week. It was a dovish press conference, with Tiff emphasizing excess supply in the economy. In the words of the BoC, economic growth likely picked up to about 1.5% through the first half of this year. However, with robust population […]
July 22, 2024 | Cutting Time
Happy Monday Morning! Headline CPI inflation decelerated in June to 2.7% year-on-year, slightly cooler than expected. The average of the Bank of Canada’s preferred core inflation measures also held steady at 2.8%. Some people would argue the job is not done, inflation must be returned to 2% and not a basis point higher, the same […]
July 15, 2024 | The Speculator as Hero
Happy Monday Morning! We’re now in the dog days of Summer, a historically slow time for housing markets that is being compounded by weaker economic activity. The unemployment rate in Canada is up 1.6 percentage points from the lows, which is already a larger increase off the lows than in several recessions over the past […]
July 8, 2024 | Whistleblower
Happy Monday Morning! Canada is a great country, we are a rich country with an abundance of natural resources, good people, and a generally stable democratic system. There is so much to look forward to, so much potential, however, there’s no doubt we have stumbled in recent years. This is largely due to poor policy, […]
June 25, 2024 | Luxury Troubles
Happy Monday Morning! National house prices slid lower in the month of May, falling 2.4% from last year. On a seasonally adjusted basis, the national home price index is now down 14% since peaking in February 2022, marking the steepest decline since the index was created back in 2005, per CREA. Source: CREA It’s true […]
June 17, 2024 | A Heist of Tax Dollars
Happy Monday Morning! It was just a few weeks ago when PM Trudeau lamented on the need for affordable housing while at the same time saying housing needs to retain value since it makes up such a large part of people’s retirements. In other words, the prime minister is trying to ride two horses with […]
June 10, 2024 | Enjoy The Moment
Happy Monday morning! As widely anticipated, the Bank of Canada slashed rates this past week, cutting by 25bps. The move was celebrated across the nation, not just by Realtors and mortagage brokers but provincial leaders in BC & Ontario. The economy is struggling so much so that it warrants a rate cut, and this is […]
June 3, 2024 | No Panacea
Happy Monday morning! Housing affordability, or lack thereof, is all the rage these days. Politicians from every colour of the political rainbow are rallying around restoring some semblance of price stability, or so they say. They’ve been working hard lately, through mass rezoning, tax breaks on new rental construction, and even housing catalogues. In fact, […]
May 27, 2024 | Hoping for the Cut
Happy monday morning! The Bank of Canada got the news they needed ahead of their rate announcement on June 05. CPI inflation decelerated to 2.7% year-over-year in April, down from 2.9% in March, and remaining below the upper end of the Bank of Canada’s 1% to 3% target range for the fourth consecutive month. The […]
May 20, 2024 | The Lost Decade
Happy Monday Morning! It’s a big week for central bank watchers and debt holders alike. The CPI report for the month of April drops tomorrow, it’s the last CPI before the Bank of Canada meets on June 05. Markets are currently pricing in just shy of 50% odds that Tiff cuts in June. It’s a […]
May 13, 2024 | Happy Monday morning!
Happy Monday morning! The labour market in Canada has weakened but hasn’t cracked, at least not yet. The economy added 90,000 jobs in the month of April, far surpassing all forecasts while also marking the largest employment increase in more than a year. What a pickle for the Bank of Canada. Rate cut expectations continue […]
May 6, 2024 | Balance Sheet Woes
Happy Monday Morning! The housing market is taking an early turn, cooling swiftly in the month of April. The month of April usually marks the middle of the busy spring selling season so it’s rather unusual to see things fizzle out this early. The problem wasn’t so much that home sales were weak, up from […]
April 29, 2024 | Happy Monday Morning!
Happy Monday morning! Last week we wrote about the big lie, the federal government claims they are going to build 3.9 million homes over the next seven years. Remember that’s 1528 homes per day, or 64 homes per hour for 7 straight years, no weekends off. So unless the homes look like this, I have some […]
April 22, 2024 | Two Big Lies
Happy Monday Morning! We typically try to steer clear of politics in these weekly musings. However, there were two big lies told by the Trudeau government this past week, both of which relate back to housing, the key focus of my work. The federal budget announced this past week brought no reduction in spending, shocking […]
April 15, 2024 | Pie in the Sky
Happy Monday Morning! The federal government will unveil their budget this Tuesday, ironically on the same day CPI data drops. They’ve already promoted billions of dollars in new spending in pre-budget announcements. Including more than $21B allocated to housing, which we discussed last week. In essence, the feds are paying for zoning. If provinces commit to […]
April 8, 2024 | Zoning for Cash
Happy Monday Morning! It’s budget season, and the fiscal taps are wide open, flush with new promises and billions in new spending. This will make life more difficult for Macklem and friends at the Bank of Canada who are still fighting the last mile on inflation. They’re on deck this week, no cut expected. It […]
April 1, 2024 | Productivity Emergency
Happy Monday Morning! The Canadian population ballooned by nearly 1.3 million in 2023, Stats Canada reported this past week. The expansion was fuelled largely by the arrival of temporary residents, which include international students, asylum seekers and people in Canada on work permits. Last year, their ranks grew by slightly more than 800,000, according to […]