Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada Sees Foreign Investment Surge, But They Want Debt—In US Dollars
Canada just saw foreign investment return—but not in a good way. The country saw a net inflow of C$25.9 billion in August, the largest in over a year, and it was almost entirely into debt. Not government debt, but corporate debt issued in U.S. dollars. The issue creates two major problems for the Bank of Canada: weaker demand for the loonie, and reduced sensitivity to domestic monetary policy. This means rate cuts are unlikely to stimulate the economy as intended.
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Canadian Real Estate Sellers Flooded The Market With Record Inventory
Canadian real estate sellers flooded the market last month. A minor increase in sales wasn’t enough to make a difference against nearly 92,000 new listings across Canada in September, 20% higher than the 10-year average for the month. The result was the weakest sales to new listings ratio for September since 1995, a period well associated with Canada’s largest housing correction.
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Canadian New Vehicle Sales Flash Another Recession Sign
Canada was hit with another recession warning—weak demand for new motor vehicles. New vehicle sales fell 7.1% in August, the largest drop for the month since 2010. The average sale price also slipped by $4,000 since the peak in December 2024. Slipping demand for durable goods like homes, vehicles, and even tools, is typically observed at the end of the business cycle, preceding a recession.
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Canadian Real Estate Developers Pull Back As Risks Rise Faster Than Incentives
Canadian homebuilders are pulling back despite the surge in taxpayer-fuelled incentives. The value of permits fell 2.4% to $7.01 billion in August, down (-7.9%) when adjusted for inflation. Even with policymakers launching unprecedented incentives to build, developers are pulling back—a clear sign that risk greatly outweighs record stimulus.
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