Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada’s Population Grew Fast, But It Was Massively Overstated
Canada’s fast-growing population isn’t moving nearly as fast it led people to believe. Due to the difficulty of tracking people leaving the country, the number of remaining immigrants is significantly inflated. The national statistics agency took a crack at estimating the “probability” of people that have left, and believes 1 in 6 immigrants leave within 20 years of arriving. This isn’t a new trend, but one that goes back to the 80s—accidentally compounding and overinflating growth.
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Canadian Population Update Trims Nearly 4 Million People
Canada’s latest population projections show the country’s trajectory is in for a sharp change. In November 2024, the IRCC announced it would be pausing population growth for two years. While most dismissed it as a minor change, the two years will shave off nearly 4 million people from projections by 2074. That may seem far off, but it dramatically changes the outlook for the country—including the mortgages taxpayers now back that extend past this date.
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Canadian Real Estate Sellers Canceled 1 In 5 Listings Last Month: NBF
Canadian real estate sellers are canceling listings at a usual rapid pace these days. Soft sales have left sellers with less demand than anticipated from rate cuts. The central bank has been slashing rates exactly as the market priced in, but that hasn’t brought mortgage costs lower than bond yields. Consequently, 1 in 5 sellers canceled their listings and are likely holding off until the Spring market. The gamble may or may not pay off, as lower rates are expected, but bond yields (and mortgage rates) have increased. Instead of holding off for more demand, there’s a good chance they may be facing more expensive mortgage credit and more listings.
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Canada’s Slowing Inflation Is An Illusion Involving A Tax Holiday
Canadian inflation has been slowing, bucking the global trend. How the fudge does that happen? It turns out it’s all in the modeling. The recent GST/HST holiday that began in December helped to lower prices in key categories. Since the CPI includes sales taxes, it led to a massive temporary price drop that concealed the increased cost when taxes were excluded. December is the first month the holiday took effect, but January will be the first full month, amplifying the drop. It gets reported in February, making it the last CPI report before the party’s leadership vote. Shortly afterward, the holiday ends, and CPI should return with a sharp increase.
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Canada Is Cutting 1 in 4 Jobs At Immigration Dept. It’s About Real Estate
Canada’s shift to aggressively pursuing growth via immigration means the country is reallocating resources. Employees at the IRCC, which oversees the execution of immigration policy, were notified that 3,300 jobs at the department will be cut. The decision seems questionable since part of the reason immigration is being tapered is due to a lack of qualified screening. The union representing the workers warns the decision is unlikely to save much money, but it will worsen wait times and make immigration more reliant on foreign outsourcing firms. Less than ideal for a place actively investigating the impact of foreign influence.
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Canadian Household Debt Accelerates As Mortgage Borrowing Returns
Canadian household debt is accelerating as mortgage borrowing returns. The outstanding balance climbed 0.4% to $3.03 trillion in November, with the vast majority being the $2.25 trillion in mortgage debt accumulating at nearly twice the pace of other segments. As interest rates fall and borrowing skews towards housing, so will the concentration of economic growth. That’s likely to amplify economic vulnerabilities and further slow productivity—a problem even the BoC has warned will have a long-term impact on prosperity.
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