ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
March 27, 2023 | Everything is a Choice
Happy Monday Morning! Many of the issues we are facing today are policy decisions. They are choices made by elected officials. While I believe most policy makers are well intentioned it doesn’t mean we should not hold them accountable when mistakes are made. After all, elected officials are put in place to serve the best […]
March 20, 2023 | Gone Missing
Happy Monday Morning! National housing data dropped for the month of February, and there’s a lot to unpack here. Home sales plunged 40% year-over-year in February, coming off a blistering hot market this time last year. When you zoom out further it was the weakest February since 2009. However, there’s a caveat. New listings utterly […]
March 13, 2023 | Gradually, then Suddenly
Happy Monday Morning! Central banks finally broke something. After leaving rates hovering near zero for over a decade and engaging in trillions of dollars worth of QE (Quantitative Easing) you can’t simply raise interest rates by 400bps in less than a year without something going boom in the night. It was never a matter of […]
March 6, 2023 | Extend and Pretend
Happy Monday Morning! Canadian banks reported first quarter earnings this past week. Those earnings provided an important glimpse into what’s shaping the nations housing market. Deep in the footnotes, CIBC reported that $52-billion worth of mortgages – the equivalent of 20% of the bank’s $263-billion residential loan portfolio were in a position where the borrower’s monthly payment […]
February 27, 2023 | Banking on the Gravy Train
Happy Monday Morning! Some good news on the inflation front in Canada this past week. Headline inflation ticked in at 5.9% year-over-year, below market expectations of 6.1%. Inflation in services, which is one of the key figures policymakers are watching, eased to 5.3%, from 5.6% in December. The Bank of Canada’s preferred median and trim […]
February 20, 2023 | Social Crisis
Happy Monday Morning! National housing figures dropped this past week, and it wasn’t pretty. January home sales fell 37% year-over-year, a sharp decline from the blistering hot bull market of January 2022. When you zoom out further, this January was the slowest since 2009. However, balancing this out was a dearth of supply trickling to […]
February 13, 2023 | Swimming Naked
Happy Monday Morning! Those holding their breath for an easing in mortgage rates were delivered some tough news last week. The Canadian labour market added 150,000 jobs in January, more than TEN times economist estimates. Let’s not forget that December jobs numbers were TWENTY times estimates. Just what the hell is going on here? Either […]
February 6, 2023 | No Bull, Caution Ahead
Happy Monday Morning! Lots of chatter these days about increased activity in the housing market. It’s true open houses are busier, stale inventory that’s been sitting for months is suddenly under contract, and some new listings are fetching multiple offers. Quite a difference four weeks can make. Is this the end of the housing bear […]
January 30, 2023 | Finding a Bid
Happy Monday Morning! As expected, one and done from the BoC this past week. Here’s Tiff Macklem, “With today’s modest increase, we expect to pause rate hikes while we assess the impacts. To be clear, this is a conditional pause. Its conditional on economic developments evolving broadly inline with our outlook.” For those playing along […]
January 23, 2023 | A Healthy Cleansing
Happy Monday Morning! We got more encouraging news on the inflation front. Consumer prices in Canada fell on a seasonally adjusted basis, dropping -0.1% month over month, the first drop since July 2020. Yes, annual inflation still looks very high at 6.3%, but that only tells us what happened a year ago. We discussed these big […]
January 16, 2023 | Big, Fat, Laggy Indexes
Happy Monday Morning! Canadian inflation data drops this week on Wednesday, January 17th. This will be an important headline given that the Bank of Canada is set to meet the following week on January 25th. As of right now the market is still expecting a 25bps rate hike, but that could change if CPI comes […]
January 9, 2023 | Brace for a Year of Volatility Ahead
Happy Monday Morning! Back to our regularly scheduled programming after a few weeks off during the holidays. Last year was an eventful year across the Canadian Real Estate spectrum to say the least. I figured i’d start off the New Year with a quick sentiment check. And the survey says… things are going to get […]
December 19, 2022 | Better Balance
Bank of Canada Governor, Tiff Macklem, delivered some final comments this week at a keynote speech in BC. He didn’t mince words following the fastest rate hiking cycle in recent history. “There’s no question that if you bought a house near the peak, you took a variable rate mortgage with a high loan to income […]
December 12, 2022 | A Pause, But Not a Pivot
To no surprise, the Bank of Canada raised rates again this past week. Another 50bps. Interest rates are now up a whopping 400bps since this tightening cycle began in March. According to Macquarie Research, this is the sharpest calendar year of rate hikes on record going back to 1936. The most common rebuttal you see […]
December 5, 2022 | Collateral Damage
Lots to unpack this week so let’s dive in. Sales figures for the month of November are making for more negative headlines, as they probably should. There is little optimism in the latest data. Greater Vancouver home sales were down 53% on a year-over-year basis. Over the past two decades there have only been two […]
November 29, 2022 | One Fell Swoop of The Pen
Last week we highlighted some recent data from Desjardins which noted that nearly every borrower who took out a fixed payment variable rate mortgage during the pandemic now owes more in interest than their original fixed payment. Trigger rates galore. It appears the Bank of Canada is finally coming around to the same conclusion. In a research […]
November 21, 2022 | The House ATM Doesn’t Work Like it Used To
No bottom yet. Data published by CREA last week showed national house prices slid lower in the month of October, dropping 1.2% month-over-month. The national home price index is now down 15% since peaking in March earlier this year, the steepest correction on record since the index was created in 2005. Just for comparison sake, […]
November 1, 2022 | Runaway Freight Trains
The Bank of Canada raised rates by another 50bps this past week, pushing prime rate to 5.95% and inflicting more pain on variable rate mortgage holders. We’ll circle back to that in a second. What’s important to note here is markets were fully pricing in a 75bps rate hike from the Bank of Canada and […]
October 25, 2022 | The Beatings Will Continue
Inflation in Canada slowed less than expected, growing by 6.9% year-over-year in September, economist expectations were at 6.7%. A small miss that will have big ramifications. Markets immediately repriced Bank of Canada rate hike odds for October 26th, now expecting another jumbo 75bps rate hike. In other words, the beatings will continue until morale improves. […]
October 17, 2022 | Faulty Models & Mortgage Fraud
The closely watched US Consumer price index surprised to the upside last week. Consumer prices rose by 0.4% in September, and while inflation is decelerating, down to 8.2% year-over-year, it remains extremely elevated. The recent advance was broad based, with Shelter, food and medical care being the largest contributors. Shelter inflation is surging, at least […]
October 11, 2022 | Waiting For a Pivot
More housing data trickling out of Canada’s two largest major metros. Greater Vancouver home sales fell 46% year-over-year. It was one of the slowest Septembers on record, other than 2008, 2012, and 2018. Prices are still moving lower, albeit mostly in suburban markets which saw excessive price gains during the pandemic. For example, the median […]
September 26, 2022 | Getting Aligned
Another massive week in the rates market with the US Federal Reserve jacking rates up another 75bps. While this was expected, it was the stark comments from Jerome Powell that really shook markets. Powell basically, in a polite way, said Americans need to endure some economic pain, including job loss, to slow demand and get […]
September 19, 2022 | Bringing Down The House
Higher interest rates continue to slow the nations housing market. National home sales, as reported by CREA, fell 25% year-over-year in the month of August. It was also the sixth consecutive monthly decline in home sales. While new listings remain weak as sellers resist selling at recent valuations, inventory is still climbing and prices continue […]
September 14, 2022 | Hellbent on Flatlining the Economy
As expected, the Bank of Canada raised interest rates another 75bps this past week. The overnight rate is now up a whopping 300bps year to date, the quickest tightening of monetary policy on a percentage basis since the 1980’s. While there was no additional commentary from BoC Governor Tiff Macklem, the official press release notes, […]
September 6, 2022 | Bear Market in Housing Continues
Canada’s second quarter GDP came in at 3.3% annualized rate, below economists forecasts of 4.4% and below the Bank of Canada’s own estimate of 4%. While weaker than expected, that won’t prevent the Bank of Canada from delivering a super sized rate hike this week on September 07th. Markets are still pricing in a 75bps […]