Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada Is Saving Its Real Estate Bubble By Creating A Rental Bubble
Canadian rental prices are again resuming their climb, but not in the expected segments. More affordable purpose-built rentals have seen price growth surge, almost closing the gap between condo apartment rentals. Rents in small cities have more than doubled the growth rate of large ones, narrowing the gap. In other words, the cost of renting almost anything across the country is getting closer regardless of the input costs. Experts call it a bubble contagion, and it’s a direct result of policymakers undermining market mechanics with excess credit to prevent any corrections in home prices & rents.
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Canadian Loonie Regained Value Lost To USD Since Tariff Threats: BMO
The Canadian dollar is finally catching a break after a rocky few years. Since 2021, the Loonie lost ground to the US dollar—a problem that accelerated with uncertainty over what a new American administration meant for trade. While the Loonie is still weak, it has recovered losses against the Greenback since November. That’s great news for consumers… until they realize it’s bad news for the Bank of Canada.
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Canadian Renters Abandon Plans To Buy Real Estate This Year: BoC
Canadian renters are abandoning their plans to buy real estate this year, according to the BoC. The share of renters intending to buy within a year made the sharpest drop in the central bank’s survey history. Who can blame them? Home prices are climbing despite sales nearing record lows with soaring inventory. Falling rates and mortgage market stimulus are pushing prices higher despite a lack of demand. At the same time, consumers are feeling economic anxiety with more people uncertain they’ll have a job in a few months.
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Over 1 In 5 Canadians Fear Losing Their Job Within 12 Months: BoC
Speaking of Canadians fearing job losses, the same Bank of Canada survey shows it’s a common fear. Over 1 in 5 Canadians fear they’ll lose their job within the next 12 months, a new record high. When consumers feel their finances are in question, they halt spending and start saving a little more. This can become a self-fulfilling prophecy, as the lack of spending slows the economy down. Consequently, companies start cutting expenses, resulting in fewer jobs.
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Canadian Business GDP Outlook Plunges, But Reality Is Typically Better: BMO
Canadian businesses feel less optimistic about the economy but it’s a trend that goes back a few years. A BoC survey shows that businesses expect GDP growth to slow significantly in the next few months. A dual front tariff war with the world’s largest economies isn’t exactly an optimistic setup. However, BMO economists found that businesses have underestimated GDP growth over the past few years. Not a trend that occurred before 2020, potentially indicating the negative sentiment isn’t as important as previously believed.
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