Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canadians Satisfied With Their Quality of Life Plunges Further
Canada is further turning into a country of haves and have-nots, according to a state survey. Statistics Canada released the latest quality of life survey results, and all but one age group is less satisfied. The vast majority of seniors (60.5%) scored highly satisfied, rising from last year. However, every other working aged adult cohort further eroded, especially those in the critical Core Aged demographic. Just 1 in 3 of the youngest Core Aged workers were highly satisfied, a sharp drop compared to previous years. The results indicate a policy that improves conditions for one group at the expense of others, causing long-term economic damage.
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Toronto New Home Sales Were The Weakest Since The 1990 Real Estate Crash
Greater Toronto real estate woes aren’t easing despite unprecedented stimulus. Developers from the region reported 2024 ended with the fewest homes sold since 1990, while inventory climbed to the highest level in nearly a decade. That year is interesting for a few reasons, with the most obvious being the region’s population has grown multiples since then. But more interesting is that was the year that Toronto’s last real estate crash kicked off, taking a full 22 years to recover in real terms despite robust immigration.
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Canadian Tax Holiday Hiding Inflation Surge, BoC Should Pause Cuts: BMO
Canada is approaching a cost-of-living trap if the central bank isn’t careful, warned a Big Six bank. BMO Capital Markets wrote to investors to explain that inflation is accelerating, but it’s even worse than it appears. CPI is being temporarily suppressed by the GST/HST sales tax holiday that ended mid-February, and compound growth going forward. Inflation is heading towards pushing above the band by March. Since rate cuts generally take between 18 and 24 months to fully impact CPI, the central bank should proceed cautiously. It already has enough stimulus to push it into hike territory, and as we just saw—consumers are more responsive to cuts than hikes. Any over-stimulus would require further hikes, which would be counterproductive to the progress made.
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Canadian Real Estate Prices Jump Despite Inventory Growth 8x Sales
Canadian real estate buyers are demonstrating that exuberance has a bigger impact than supply on prices. CREA data shows home prices launched higher in December, making an unusually strong advance in January. The move came with only a mild improvement to sales, and a big jump in inventory, printing a ratio that typically results in zero-to-negative price growth. The Bank of Canada deputy governor warned against the mortgage market “tinkering” that policymakers were considering, as it would erode affordability. That warning was ignored.
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