Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canadian Real Estate Is Crashing At One of The Fastest Rates Ever
Canadian real estate is in the middle of one of the sharpest corrections on record. Real home prices have dropped 24.2% since Q1 2022, making it the second-deepest decline ever, according to the US Federal Reserve. Only 12 quarters in, this correction may still have a long way to go by historical standards—the ‘90s bubble correction lasted 26 quarters.
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Canadian Job Losses Reinforce Confidence Crisis, Kill “Soft Landing” Narrative
Canada’s job market is deteriorating faster than expected, shredding the soft landing narrative. The unemployment rate rose 0.2 points to 7.1% in August—the highest since 2016, excluding the pandemic. The working-age population expanded by 29.4k (+0.1%), but the labour force contracted by 31.2k (-0.1%), showing the damage is driven by job losses—not just population growth outpacing hiring. The data compounds a growing crisis of confidence, amplifying the issues created by capital flight and an outsized reliance on government-driven economic activity.
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Toronto Real Estate Sets Inventory Record, Prices Down 24% From Highs
Toronto home sales saw a modest bump in August, but record inventory crushed prices further. TRREB reported 5,211 sales (+2.35% Y/Y), but the improvement still left it as the second weakest August in 25 years. A record high for inventory made matters worse, pushing prices down sharply. Despite a 24% drop from the 2022 peak, affordability remains strained, continuing to weigh on demand.
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Canadian Economy In Excess Supply, Expected To Worsen: National Bank
National Bank warns Canada’s economy is facing a broad excess supply, from labour to exports. Private sector payrolls fell 32.9k in June across 18 of 20 sectors, while Q2 GDP contracted 0.1% and exports plunged 26.8%. The bank’s economists urge policymakers to make a trade deal as fast as possible to mitigate further damage and begin to repair the economy. However, it’s unlikely to be a fast recovery as decades of confidence-building were undermined over just a few weeks.
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