This Week’s Top Stories: Canadian Real Estate Has Never Been Less Affordable & Low Rates Don’t Help
Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Buying A House In Canada Has Never Been Harder, Years To Correct: RBC
Canada’s largest bank warns it’s never been more difficult to buy a home in the country. RBC warns a median household would need to spend up to 108% of their income to purchase a median home in cities across Canada. The erosion in affordability is like nothing seen in the country’s history. Even “affordable” markets now require close to half a household’s income just to carry the mortgage payments.
Canada Added 58k Workers But Lost 2k Jobs Last Month
The good news? Canada is rapidly adding to its workforce. The bad news? The country somehow lost jobs. The latest labor force survey shows 57.7k more workers added to the economy in just March. At the same time, those workers were chasing 2k fewer jobs. Rapid population growth was supposed to stimulate demand, thus creating more jobs. Unfortunately, the growth was so fast it had an inflationary impact on housing, actually reducing consumption.
Canada’s National Housing Agency Forecasts A 20% Jump For Home Prices
The CMHC, Canada’s national housing agency, sees higher home prices and slower building. Their existing home price forecast sees home prices rising a whopping 20% over the next two years, based on tight demand. Despite this demand surge (not to mention the agency’s helicopter cash to incentivize development), they see the pace of new home construction slowing.
Canadian Population Sees Record Growth, Mostly “Temporary” Residents
Canada’s population is rapidly expanding but it’s mostly “temporary” residents. Stat Can estimates over 40 million people as of Jan 1, 2024, about 3.2% annual growth. This is the fastest growth rate recorded since 1957, but whether this kind of growth can persist isn’t clear. Most of the growth is temporary residents, including temporary workers and students. With reduced applications and government-imposed limits coming, growth can taper fast.
Global Real Estate
Lower Rates Do Not Improve Housing Affordability: US Federal Reserve
The Dallas branch of the US Federal Reserve is warning that low rates don’t improve affordability. Researchers with the world’s largest central bank warn low interest rates influence demand, not just affordability. Any perceived improvements are “naive,” ignoring the demand incentive that low rates provide. Had rates not been raised, affordability would have continued to erode. This reflects research presented by Canada’s central bank shortly after rate cuts in 2021.
Toronto Real Estate
Toronto real estate prices climbed significantly as buyers braced for competition. A typical home saw its price climb $19.7k over just the month of March. There’s just one problem—the anticipated competition for buyers didn’t actually occur. The market saw significantly more inventory but the fewest sales of any March since 2009. More bluntly, people paid more because they wanted to, not because the market was tighter.
Toronto Real Estate Prices Surge Despite Fewest Sales Since 2009
You Might Also Like
Discover more from reviewer4you.com
Subscribe to get the latest posts to your email.
