AGENT LICENSE ID

12347

BROKERAGE LICENSE ID

12347

Greg Lemoine

Name: Greg Lemoine
Address: 610 Bronson Ave, Ottawa, Ontario, Canada
Telephone: 613.852.4201

Mortgage Agent Level 2

Office:

Capital Home Lending

Phone:

613.852.4201

Email:

greg@capitalhomelending.ca

Address:

610 Bronson Ave, Ottawa, Ontario, K1S 4E6

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NBC: Residential market improved for the 4th consecutive month in July

7/4/2025

7/2/2025

By TD Economics Highlights Weve modestly upgraded our home sales growth forecasts for the second half of the year across Canada. This represents the assumption that pent-up demand that was sidelined in a weaker-than-expected first half returns to the market. The data is cooperating with this narrative, with Canadian home sales up 4% m/m in May after inching higher in April. However, uncertainty remains elevated, and job markets are deteriorating. As such, even if sales levels improve, they are likely to remain subdued, particularly in B.C. and Ontario. Weve nudged up our average home price growth forecasts in markets outside of B.C. and Ontario for the back half of the year, as sales gains interact with supply/demand balances that favour sellers in these regions. Were retaining our view that quarterly price growth will be the firmest in the Prairies in the second half of 2025. In contrast, 2025H2 home price growth is seen as declining, on average, in B.C. and Ontario. Supply/demand balance indicators suggest that there is too little demand chasing too much supply in these markets, leaving buyers with some power in negotiations. We could see a compositional boost to prices (i.e. sturdier sales gains for more expensive properties that upwardly pressure average prices), particularly in Ontario, however. This reflects the assumption of some underperformance in the less-expensive GTA condo market due to weak investor demand. Were expecting stronger growth in Canadian home sales and average home prices in 2026, backed by an improving economy, reduced uncertainty, and a modest downdraft in yields from their current levels. However, the scale of bounce-back in Canadian average home prices will likely be restrained by poor affordability in key markets like B.C. and Ontario. Whats more, population growth should remain weak next year, restraining rent gains and preventing any notable recovery in investor demand. We expect the federal governments housing plan to boost supply. However, given that the federal budget will only land this fall, along with lags inherent in the homebuilding process, we wouldnt expect a material boost to housing completions until perhaps late next year (at the earliest). Absent a steep recession, any significant improvement in housing affordability would take time and require a sustained ramp up housing construction. https://economics.td.com/ca-provincial-housing-outlook

6/27/2025

Highlights Mortgage lenders entered 2025 in a healthy position, but economic uncertainty is increasing risk to the residential mortgage market. At the household level, unemployment is the most common cause of late mortgage payments. Variable rate mortgages became the most popular mortgage type in early 2025, reaching 42% of new mortgages in February, as the premium for variable-rate mortgages largely disappeared. Terms between 3 and less than 5 years were also still popular with new borrowers (32%). This speeds up the impact of future interest rate changes on borrower payments. New borrowers have taken advantage of lower interest rates to reduce their monthly payments. They havent shortened their amortization periods to the levels prior to the increase in interest rates. Mortgage lending by the largest alternative lenders outpaced the growth of national mortgage credit in 2024. These lenders risk profile has increased moderately due to higher delinquency rates, leading them to increase their loan loss allowance. https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/research-reports/housing-finance/residential-mortgage-industry-report

6/24/2025

CANADA HOUSING MARKET: HOUSING RESALE ACTIVITY PICKED UP IN MAY 2025ARE WE WITNESSING EASING EFFECTS FROM TRADE-RELATED UNCERTAINTY ON HOUSING DEMAND? SUMMARY National housing resale activity increased from April to May with both sales and new listings rising, leaving market conditions relatively unchanged over this period. Sales increased 3.6% (sa figures) nationally from April to May, following a 0.8% increase from March to April (revised from an initially published -0.1% decline). Despite monthly increases in the last 2 months, national sales were -4.3% (nsa) weaker in May 2025 than in May 2024. In May 2025, national sales were about 35% lower than their February 2022 level, the month just before the Bank of Canada started its tightening cycle for its policy rate. National new listings rose 3.1% (m/m sa) in May and were 8% higher (nsa) than their level in the same month of 2024. In May, new listings continued their upward trend since their recent trough in March 2023. From this period to May 2025, national new listings increased by more than 40% (from sa figures). With the modestly stronger increase in national sales than for new listings, the national sales-to-new listings ratio tightened negligibly, rising from 46.8% to 47.0% from April to May, suggesting resale conditions stayed essentially unchanged over this period and are still within the estimated balanced conditions range, but very close to the buyers favouring conditions zone. Indeed, observed (sa) levels for this indicator in the last 3 months were the lowest since February 2009. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-news-flash.june-16--2025.html

6/20/2025

By TD Economics Amid a downgraded national growth profile for 2025, were retaining our view that the Atlantic and Prairie Regions outperform this year. B.C.s economy is also expected to display resilience. In contrast, Ontario and Quebec are poised for much softer growth performances given their relatively high orientation towards manufacturing. Provincial economies across the country benefitted from a sharp rise in exports in Q1 due to tariff-front running, but the near-term trade picture is indeed rocky. Ontario and Quebec will see disproportionate impacts from U.S. tariffs on the steel, aluminum, and automotive sectors. Were also expecting that additional U.S. levies on copper, pharmaceuticals, semiconductors and lumber will be applied. Our assumption of a gradual easing in U.S. tariff rates by year end means that the stage is set for a modest recovery in Canadas industrial heartland in 2026. Commodity based economies are holding up better this year, but growth has still been downgraded relative to March. Expedited OPEC+ output plans and weak global demand have led us to mark down our oil price forecast, accentuated by an unexpectedly strong Canadian dollar. The recent escalation in Middle East tensions pose an upside risk to prices in H2-2025. Canadas labour market continues to cool. Ontario, Quebec, B.C., and Manitoba have been absorbing most of the shock so far this year, as unemployment rates have risen faster than in other regions. Unemployment rates in the Atlantic provinces have broadly stabilized as employment growth and labour force growth have weakened in tandem. Saskatchewans labour market is the clear provincial standout due to its relative strength. With this years provincial budget season wrapping, a few themes have emerged. Provincial revenues and overall fiscal balances are expected to take a hit this year, reflecting U.S. trade tensions, and provinces have introduced measures to buffer their respective economies in the short run. Ramped up capital spending plans also featured heavily. This could lift economic growth, but is also expected to boost already-elevated debt burdens. With some signals that pent-up demand may be returning, were expecting positive growth in home sales in the back half of next year across Canada. Still, a weak economy and uncertainty should keep sales levels subdued. Near-term national home price growth will be restrained by loose supply/demand balances in B.C. and Ontario, although firmer price gains are expected elsewhere, where conditions are considerably tighter. https://economics.td.com/provincial-economic-forecast

6/19/2025

The number of home sales recorded over Canadian MLS Systems climbed 3.6% between April and May 2025, marking the first gain in activity since last November. The monthly increase was led by the Greater Toronto Area (GTA), Calgary, and Ottawa. May 2025 not only saw home sales move higher at the national level for the first time in more than six months, but prices at the national level also stopped falling, said Shaun Cathcart, CREAs Senior Economist. Its only one month of data, and one car doesnt make a parade, but there is a sense that maybe the expected turnaround in housing activity this year was just delayed for a few months by the initial tariff chaos and uncertainty. May Highlights: National home sales were up 3.6% month-over-month. Actual (not seasonally adjusted) monthly activity came in 4.3% below May 2024. The number of newly listed properties rose 3.1% on a month-over-month basis. The MLS Home Price Index (HPI) was almost unchanged (-0.2%) month-over-month and was down 3.5% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price was down 1.8% on a year-over-year basis. https://stats.crea.ca/en-CA/

6/13/2025

Highlights: Canadian housing affordability posted a fifth consecutive improvement in Q125. The mortgage payment on a representative home as a percentage of income (MPPI) fell 0.7 percentage point. Seasonally adjusted home prices increased 1.1% in Q125 from Q424; the benchmark mortgage rate (5-year term) declined 15 basis points, while median household income rose 0.8%. Affordability improved in 8 of the ten markets in Q1. On a sliding scale of markets from best progression to least: Vancouver, Toronto, Victoria, Hamilton, Ottawa-Gatineau, Calgary, Winnipeg and Edmonton. On the flip side, Montreal and Quebec deteriorated in the first quarter. Countrywide, affordability enhanced 0.9 pp in the condo portion and 0.7 pp in the non-condo segment. Housing affordability remains a significant challenge for Canadians, though the first quarter of 2025 brought continued relief. Nationally, affordability improved for the fifth consecutive quartermarking the longest such streak since 20082009. This progress brought the mortgage payment as a percentage of income (MPPI) to its lowest level in three years. Despite higher home prices across all markets, affordability gains were more widespread this quarter, supported by rising incomes and declining interest rates. Since peaking in late 2023, 5-year mortgage rates have fallen by a cumulative 91 basis points, reaching their lowest point in nearly three years. However, Montreal and Quebec City were notable exceptions. Home prices surged by 3.0% and 4.2% respectively during the quarter, preventing any affordability improvements. These markets remained resilient despite broader trade uncertainty, supported by less-stretched valuations and a still-strong labour market. Notwithstanding the widespread improvement in Q1, the composite MPPI remains well above its historical average. Anticipating the second quarter, further improvements in affordability from mortgage interest rates are likely to be limited, as the drop in 5-year rates is marginal thus far. However, ongoing weakness in Ontario and British Columbias real estate markets could lead to price drop in several cities. Over the longer term, a slowdown in immigration and softening labour market conditions may also ease pressure on housing demand. Still, resolving market imbalances will take time. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/housing-affordability.pdf

6/11/2025

At a Glance In 2025, more first-time home buyers entered the market and about 60% used mortgage loan insurance. Renovation activity is growing, with 55% of homeowners doing renovations in the last 3 years. Websites are still the top source for mortgage information, but social media use has nearly doubled, with YouTube becoming more popular than Facebook. 2025 Housing Market Trends Canadas housing market is changing from more first-time homebuyers to a stronger focus on eco-friendly living. This year, there was an increase in first-time homebuyers. Most of them said they decided to buy because they were financially ready. They had saved up their down payment, qualified for a mortgage and felt prepared to become homeowners. On average, it took homebuyers 3.4 years to save for a down payment, compared to 4.2 years the previous year. Gifted money provided homebuyers with an average of about $80,000 to help them purchase a home. Renovations are gaining momentum. Over half of mortgage consumers completed upgrades within the last 3 years and 75% plan to renovate in the next 5 years (excluding those who dont know). Energy-efficient changes stand out due to high satisfaction levels (93%) and about 80% of homeowners reported saving money on energy bills. Mortgage consumers are turning to new ways to gather information. While websites remain the top choice, social media usage has surged, nearly doubling compared to last year. YouTube has replaced Facebook as the most-used social platform for this purpose. Younger audiences and first-time homebuyers are leading this shift to explore digital channels for advice and insights. https://www.cmhc-schl.gc.ca/blog/2025/a-fresh-look-at-canadas-mortgage-consumers

6/6/2025

Survey shows concerns about inflation and their own financial situations increased by 16 points. A special report from the BMO Real Financial Progress Index reveals Canadians concerns about their personal finances have surged amid increased economic uncertainty and market volatility. The survey explored changes in Canadians concerns about their finances and current economic conditions between March and April 2025, and found: Cost of living considerations: 78% reported growing concerns about the cost of living in April a 17-point increase from 61% in March. Inflation concerns intensify Over three quarters (76%) say their concerns about inflation have increased a 16-point increase from 60%. Temperature on tariffs: Concerns about the impact of US tariffs increased from 65% to 74%. Rising recession risks: Canadians concerns about the prospect of economic recession increased from 60% to 74%. Pulse on personal finances: Nearly three in five (58%) say they are more concerned about their financial situation a 16-point increase from the 42% in March. In addition, nearly one quarter (24%) reported in April they are increasingly concerned about the prospect of losing their job. Canadian consumer confidence recently plummeted to the lowest depths in at least six decades on fear that the trade war will cost people their jobs and undermine their financial security. However, sentiment improved modestly in April amid a partial de-escalation of the trade war. A more recent recovery in equity markets should support confidence further in May, said Sal Guatieri, Senior Economist, BMO. While BMO Economics is concerned about the economic impact of tariffs, we are less worried about the inflation outlook, as retaliatory tariffs on imports from the U.S. have been restrained. CPI inflation will likely hold close to the Bank of Canadas 2% target this year, paving the way for some further reductions in policy rates. https://newsroom.bmo.com/2025-06-04-BMO-Survey-Personal-Finance-Concerns-Rose-Significantly-Between-March-to-April-2025

6/4/2025

The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%. Since the April Monetary Policy Report, the US administration has continued to increase and decrease various tariffs. China and the United States have stepped back from extremely high tariffs and bilateral trade negotiations have begun with a number of countries. However, the outcomes of these negotiations are highly uncertain, tariff rates are well above their levels at the beginning of 2025, and new trade actions are still being threatened. Uncertainty remains high. While the global economy has shown resilience in recent months, this partly reflects a temporary surge in activity to get ahead of tariffs. In the United States, domestic demand remained relatively strong but higher imports pulled down first-quarter GDP. US inflation has ticked down but remains above 2%, with the price effects of tariffs still to come. In Europe, economic growth has been supported by exports, while defence spending is set to increase. Chinas economy has slowed as the effects of past fiscal support fade. More recently, high tariffs have begun to curtail Chinese exports to the US. Since the financial market turmoil in April, risk assets have largely recovered and volatility has diminished, although markets remain sensitive to US policy announcements. Oil prices have fluctuated but remain close to their levels at the time of the April MPR. In Canada, economic growth in the first quarter came in at 2.2%, slightly stronger than the Bank had forecast, while the composition of GDP growth was largely as expected. The pull-forward of exports to the United States and inventory accumulation boosted activity, with final domestic demand roughly flat. Strong spending on machinery and equipment held up growth in business investment by more than expected. Consumption slowed from its very strong fourth-quarter pace, but continued to grow despite a large drop in consumer confidence. Housing activity was down, driven by a sharp contraction in resales. Government spending also declined. The labour market has weakened, particularly in trade-intensive sectors, and unemployment has risen to 6.9%. The economy is expected to be considerably weaker in the second quarter, with the strength in exports and inventories reversing and final domestic demand remaining subdued. https://www.bankofcanada.ca/2025/06/fad-press-release-2025-06-04/

5/30/2025

Understanding the housing use of immigrants and non-permanent residents (NPRs) is important for developing effective housing policies and urban planning strategies. Using 2021 Census data, this study estimates housing unit occupancy ratesdefined as the number of dwellings per 1,000 peoplefor immigrants and NPRs. These rates reflect housing use constrained by factors such as financial resources, living preferences and housing supply availability. The analysis of the 2021 Census data shows that immigrants typically exhibit higher housing occupancy in the ownership and rental markets compared with Canadian-born individuals. On average, immigrants occupy 310 owned units and 151 rental units per 1,000 people, totalling 461 housing units, compared with 397 housing units for Canadian-born individuals. NPRs, meanwhile, occupy 41 owned units and 316 rental units per 1,000 people, for a total of 357 housing units. As immigrants spend more time in Canada, their reliance on the rental market decreases and homeownership increases. In their initial years after admission, immigrants have lower housing occupancy rates than Canadian-born individuals. Over time, however, their housing occupancy rises significantly, driven by a substantial growth in homeownershipunderscoring the lasting impact of immigration on the ownership market. The findings also suggest that an increase in immigration would particularly heighten demand for single-detached homes in the ownership market and for rental apartments, while a rise in NPRs would primarily boost demand for rental apartments. Additionally, immigrants and NPRs are both more likely to own homes in smaller municipalities than in larger municipalities, emphasizing varying impacts of immigrants and NPRs across different municipal contexts. https://www150.statcan.gc.ca/n1/pub/36-28-0001/2025005/article/00003-eng.htm

5/28/2025

By TD Economics Key Takeaways: The Bank of Canada is set to make another rate announcement on June 4 TD Economics predicts that the central bank will deliver two more rate cuts this year, though the exact timing is up in the air When the central bank cuts its rate, it can become cheaper for Canadians to borrow money If youre a homeowner with a mortgage or someone looking to buy, youll likely be wondering what the Bank of Canada (BoC) is going to do this year when it comes to interest rates. Thats because whenever the BoC cuts its lending rate, it can become cheaper for Canadians to borrow money. And when the BoC raises its lending rate, it can become more expensive. According to TD Economics, the central bank might offer some rate relief in the coming months. The ongoing softness in the labour market should open the door for the BoC to cut interest rates two more times this year, despite the recent uptick in inflation. Amid trade tensions with the U.S., Andrew Hencic, Director and Senior Economist at TD Economics, said two cuts of 25 basis points each could help support the economy without putting too much more pressure on inflation. That means the current rate of 2.75% could come down to 2.25% by the end of the year. We think that enough slack has accumulated in the economy that theres space for the central bank to cut its lending rate a little bit more without too much inflationary pressure coming through, Hencic said. https://stories.td.com/ca/en/article/bank-of-canada-interest-rate-prediction-june-2025

5/27/2025

Canadian households spent an average of $76,750 on goods and services in 2023, up 14.3% from 2021. Amid the recovery from the COVID-19 pandemic, this was the largest two-year increase observed since the series began in 2010. The rise in household spending was partly attributed to consumer inflation, as the Consumer Price Index increased by 10.9% from 2021 to 2023. Shelter accounted for 32.1% of total consumption of goods and services in 2023, followed by transportation (15.8%) and food (15.7%), which remained the three largest spending categories. Household spending on food purchased from restaurants, recreation, and accommodation away from home rebounded and exceeded pre-pandemic levels In 2023, Canadian households spent an average of $12,046 on food, an increase of 16.9% from 2021. Average spending on food purchased from stores was $8,659, up 7.4% from 2021. Following a 21.1% decline from 2019 to 2021, average spending on food purchased from restaurants rose to $3,351 in 2023 as pandemic restrictions eased. Households spent an average of $5,231 on recreation in 2023, up 23.9% from 2021, following an 8.7% decrease from 2019 to 2021. The increase in 2023 was primarily driven by a rebound in spending on recreational services (+120.7%), such as movie theatres, live sporting and performing arts events, and package trips, which aligned with record high operating revenue in the spectator sports, event promoters, artists and related industries sector in 2023. Following a 44.9% decrease from 2019 to 2021, average spending on accommodation away from home, such as hotels and motels, increased to $910 in 2023, rising by 129.2% from 2021 and surpassing the pre-pandemic level of 2019. Homeowners spent more on mortgage payments and condo fees in 2023 In 2023, homeowners spent an average of $27,831 on shelter, up 17.4% from 2021. Homeowners without mortgages spent an average of $13,750 (+7.5%) on shelter, while those with mortgages spent an average of $38,718 (+16.9%). Mortgage payments ($21,342) accounted for more than half of this total and increased by 15.3% from 2021, reflecting in part the impacts of rising interest rates from 2022 to 2023. On average, homeowners with mortgageswho made up more than half of homeownersspent 37.2% of their total consumption on shelter, the highest proportion recorded since 2010. For homeowners, average spending on condo fees was $1,118 in 2023, up 52.9% from 2021, the largest two-year increase rate observed since 2010. Renters spent an average of $18,333 on shelter in 2023, up 20.2% from 2021. Of this total, $15,272 went to rent, up 16.9% from 2021. On average, rent payments accounted for approximately one-quarter of renters total consumption, a proportion that has remained relatively stable since 2010. https://www150.statcan.gc.ca/n1/daily-quotidien/250521/dq250521a-eng.htm

5/23/2025

CANADA HOUSING MARKET: TRADE UNCERTAINTY CLOUDING THE INCOME OUTLOOK AND REDUCES HOUSING DEMAND From March to April national sales were essentially unchanged while new listings declined, leading to a marginal rise in the sales-to-new listings ratio over this period. Despite the uptick for this indicator in April, market conditions have significantly eased since the beginning of this year as reflected by the trend decline in this indicator and the rise in the months of inventory almost to its pre-pandemic average. National housing sales stayed relatively stable from March to April, edging down marginally (-0.1%), almost halting their constant decline since November 2024 (with a cumulative drop of 19.2%), the time when the upcoming U.S. administration made clear that imports from Canada and other countries would be slapped with steep tariffs and subsequently followed through with this stated intention. In April, sales were near 18% below their 2015-2024 period average level. National sales were -9.8% lower in April than their level in the same month of 2024. New listings declined -1.0% nationally from March to April but are still at relatively high historical levels, exceeding their 2015-2024 period average by about 7.2%. They increased 1.2% from the same month in 2024. Despite the modest uptick in the sales-to-new listings ratio from March to Aprilfrom 46.4 to 46.8%this indicator has been trending towards the estimated threshold for buyers favourable conditions since November of last year. Indeed, this indicator has eased considerably since the Bank of Canada started hiking its policy rate in March 2022 as sales trended down at a faster pace (a -38.3% cumulative decline since February 2022) than new listings (-5.7%). https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-news-flash.may-15--2025.html

5/21/2025

The number of sales recorded over Canadian MLS Systems was unchanged (-0.1%) between March and April 2025, marking a pause in the trend of declining activity since the beginning of the year. Demand is currently hovering around levels seen during the second half of 2022, and the first and third quarters of 2023. At this point, the 2025 Canadian housing story would best be described as a return to the quiet markets weve experienced since 2022, with tariff uncertainty taking the place of high interest rates in keeping buyers on the sidelines, said Shaun Cathcart, CREAs Senior Economist. Given the increasing potential for a rough economic patch ahead, the risk going forward will be if an average number of people trying to sell their homes turns into a large number of people who have to sell their homes, and thats something we have not seen in decades. April Highlights: National home sales were unchanged (-0.1%) month-over-month. Actual (not seasonally adjusted) monthly activity came in 9.8% below April 2024. The number of newly listed properties fell 1% on a month-over-month basis. The MLS Home Price Index (HPI) declined 1.2% month-over-month and was down 3.6% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price was down 3.9% on a year-over-year basis. https://www.crea.ca/media-hub/news/declines-in-canadian-home-sales-take-a-pause-in-april-despite-ongoing-tariff-pressures/

5/16/2025

Home sales remained relatively unchanged (-0.1%) from March to April following four monthly contractions. As a result, the number of transactions was 19% below the level in November last year, reversing last years rebound following the central banks interest rate cuts, and roughly in line with the depreciated level of sales observed in 2022. Sales increased in 6 of the countrys 10 provinces: New Brunswick (+5.2%), Manitoba (+3.3%), Quebec (+2.0%), Newfoundland (+1.9%), Nova Scotia (+1.8%), and Ontario (+1.1%). On the other hand, sales declined in B.C. (-2.3%), Alberta (-3.4%), Saskatchewan (-6.3%), and P.E.I. (-6.5%). There is no doubt that the ongoing trade conflict with the U.S. has weighed on consumer confidence and the housing market across the country, with potential buyers waiting for more economic visibility before acting. On the supply side, new listings decreased 1.0% from March to April. Combined with the low level of sales, active listings increased by 1.9% during the month, the fourth monthly advance in a row despite still elevated cancelled listings in April. Overall, the number of months of inventory (active listings-to-sales) increased for the fifth consecutive month, edging up from 5.0 in March to 5.1 in April, its highest level since April 2019 (excluding Covid). Meanwhile, market conditions loosened slightly during the month but remained relatively balanced compared to the historical average. This balanced market condition at the national level is explained by particularly soft conditions in Ontario and B.C., while market conditions in every other province continue to indicate a favourable to sellers market. These looser market conditions have had an impact on prices, with the MLS Home Price Index declining by 1.2% month-over-month and by 3.6% year-over-year. On an annual basis, home sales dropped by 9.8% compared to April 2024, thus reaching their lowest level for that period of the year since 2009. Sales were down in four of the ten provinces: Ontario (- 20.2%), B.C. (-14.6%), Alberta (-11.7%), and Saskatchewan (-10.6%). On the other hand, the sharpest increases were observed in Quebec (+10.0%), Newfoundland (+7.4%), and Manitoba (+6.6%). For the first four months of 2025, cumulative home sales were down 7.2% compared to the same period in 2024. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-canada.pdf

5/14/2025

In March, the total value of building permits issued in Canada decreased by $549.4 million (-4.1%) to $12.9 billion. The decrease was led by the non-residential sector (-$716.3 million), and it was tempered by the residential sector (+$166.9 million). On a constant dollar basis (2017=100), the total value of building permits issued in March decreased 5.1% from the previous month and was up 11.1% on a year-over-year basis. Single-family permits slow residential sector growth Residential construction intentions in Canada increased $166.9 million (+2.0%) in March to reach $8.7 billion. A gain in the multi-family component (+$322.5 million to $5.9 billion) was partially offset by a decline in the single-family component (-$155.6 million to $2.8 billion). The rise in the multi-family component in March was particularly strong in British Columbia (+$397.8 million), driven by the Vancouver census metropolitan area (CMA) (+$652.3 million). Meanwhile, the single-family component decrease was primarily observed in Ontario (-$185.7 million) and was supported by Quebec (-$26.0 million). Overall, 22,800 multi-family dwellings and 4,400 single-family dwellings were authorized for construction in March, representing a 4.6% increase from the previous month. https://www150.statcan.gc.ca/n1/daily-quotidien/250514/dq250514a-eng.htm

5/9/2025

A stable and efficient financial system is essential for sustaining economic growth and raising standards of living. In the Financial Stability Report, the Bank of Canada assesses the resilience of the Canadian financial system and focuses on key risks that could undermine its stability. Ultimately, financial stability benefits all Canadians. Key takeaways Canadas financial system is resilient. Overall, households, businesses, banks and non-bank financial intermediaries successfully weathered the pandemic, a period of elevated inflation, and sharp increases in interest rates. Over the past 12 months, Canadian households have been carrying, on average, less debt relative to their income, and insolvency filings by businesses have dropped significantly. But there are pockets of financial stress. The economic impacts of the pandemic, as well as elevated housing prices due to persistent imbalances in the housing market, have led to higher levels of debt for some households and businesses. This has made them more vulnerable to financial shocks. Because Canadian households and businesses have remained resilient overall, financial institutions have not come under stress. Canadian banks have generally maintained elevated capital buffers and have increased provisions for credit losses. Liquidity levels have remained high, and access to funding has continued to be strong. Recently, large and abrupt shifts in the direction of US trade policy have led to some bouts of extreme market volatility, including in the normally low-risk market for US Treasuries. This volatility tested the resilience of market participantsparticularly non-bank financial intermediaries deploying arbitrage strategies in the US Treasury market. The trade war currently threatens the Canadian economy and poses risks to financial stability. Near-term unpredictability of US trade and economic policy could cause further market volatility and a sharp repricing in assets, leading to strains on liquidity. In extreme circumstances, market volatility could turn into market dysfunction. In the medium to long term, a prolonged global trade war would have severe economic consequences. It would reduce economic growth and increase unemployment. Some households and businesses would be unable to continue making debt payments. If household and business credit defaults were to occur on a large scale, banks could see greater losses than they have provisioned for. This could lead them to pull back on lending, potentially exacerbating economic and financial stress. The Bank of Canada is watching developments closely and remains in regular contact with financial system participants and with other financial authorities in Canada and globally. A stable and resilient financial systemone that absorbs shocks and does not amplify themcan help the economy through periods of turbulence. https://www.bankofcanada.ca/2025/05/financial-stability-report-2025/

5/7/2025

Half believe owning a home is less attainable than in 2024. 43% of homeowners say they could not have purchased their home without family assistance. The latest BMO Real Financial Progress Index reveals that while over two thirds (67%) of homebuyers are waiting for interest rates to drop before purchasing a home a 5% decrease from 2024 experts say many more Canadians may take a wait and see approach as concerns about the prospect of an economic recession increased from 60% to 74% from March to April 2025. Canadas housing market remained under pressure heading into the spring, with sales and prices both weakening further, said Robert Kavcic, Senior Economist, BMO Capital Markets. There is some clear underlying weakness as inventory builds and investors remain absent. Suffice it to say, homebuyers are losing confidence and motivation, especially in areas of B.C. and Southern Ontario. The BMO survey examines how concerns about the economy have influenced Canadians homebuying decisions: Revisiting Rates: Over two-thirds (67%) of prospective homeowners believe rates affect their buying decisions. Two in five (38%) Canadians are waiting for rates to drop to 3% or lower before purchasing or refinancing home. In addition, 44% admit they are unsure about the rate they would be comfortable with to move forward with buying or refinancing their home. Missed Momentum: When looking at the current housing market, 56% of prospective homeowners feel they missed their moment to buy a home. Two-thirds (66%) of Millennials feel they had missed their homebuying moment more than any other generation. Challenged Confidence: While 59% of Canadians believe homeownership is one of their greatest life aspirations, half (50%) believe owning a home is less attainable than it was 12 months ago, and two-thirds (66%) are less confident that they will own a home in their lifetime compared to five years ago. Deferred Demand: Among the 38% of homebuyers planning on purchasing a home in the near future, only 14% plan to in 2025 and a quarter (24%) plan on doing so in 2026 or later. Location, Location, Location: More than half (52%) of aspiring homebuyers would consider moving to a different province or country in order to afford buying a home. https://newsroom.bmo.com/2025-05-05-BMO-Survey-Rising-Recession-Concerns-Among-Canadians-Sidelining-Prospective-Homebuyers

4/30/2025

Canadian home sales fell on a month-over-month basis once again in March 2025, as rising tariff turmoil and uncertainty is keeping home buyers on the sidelines. Sales activity recorded over Canadian MLS Systems sank 4.8% month-over-month in March 2025. Along with declines in each of the three previous months, national home sales are now down 20% from their recent high recorded last November. Up until this point, declining home sales have mostly been about tariff uncertainty. Going forward, the Canadian housing space will also have to contend with the actual economic fallout. In short order weve gone from a slam dunk rebound year to treading water at best, said Shaun Cathcart, CREAs Senior Economist. While the largest of these declines have been seen in Ontario and British Columbia, sales are down over the last few months in all but a handful of small markets across the country. On a non-seasonally adjusted basis, the overall Canadian sales total for March 2025 fell 9.3% year-over-year and was the lowest for that month since 2009. https://stats.crea.ca/en-CA/

4/25/2025

Home sales fell by 4.8% between February and March, the fourth consecutive monthly drop in a row for this indicator. Following this decline, the number of transactions was 20% below the level in November last year, reversing last years rebound following the central banks interest rate cuts. Milder weather in March, particularly in the eastern provinces, failed to stimulate the housing market, as sales declined in 8 of the countrys 10 provinces, with P.E.I. (+2.7%) and Saskatchewan (+0.3%) being the exceptions. Newfoundland (-12.9%), New Brunswick (-8.7%), Ontario (-7.1%), B.C. (-7.0%), and Manitoba (-5.2%) experienced above-average declines in sales, while Nova Scotia (-4.5%), Quebec (-3.1%), and Alberta (-0.6%) experienced smaller drops. There is no doubt that the ongoing trade war with the U.S. has weighed on consumer confidence and the housing market across the country, with potential buyers waiting for more economic visibility before acting. On the supply side, new listings rebounded 3.0% from February to March following an 11.9% decrease the previous month. Combined with the decrease in sales, active listings increased by 3.3% during the month, the third monthly advance in a row despite still elevated cancelled listings in March. Overall, the number of months of inventory (active listings-to-sales) increased for the fourth consecutive month, jumping from 4.7 in February to 5.1 in March, its highest level since April 2019 (excluding Covid). Meanwhile, market conditions loosened sharply during the month and moved from slightly tighter than their historical average to looser than average for the first time since June 2019 (excluding Covid). This was mainly due to a sharp softening in market conditions in Ontario and B.C., which are now deep into favourable to buyers territory. All other provinces are still showing tighter than average market conditions. These suppler market conditions have had an impact on prices, with the MLS Home Price Index declining by 1.0% month-over-month and by 2.1% year-over year. On an annual basis, home sales dropped by 9.3% compared to March 2024, thus reaching their lowest level for that period of the year since 2009. Sales were down in four of the ten provinces, with the biggest decreases in Ontario (-24.6%) and B.C. (-9.6%), while the sharpest increases were observed in P.E.I. (+13.5%), Newfoundland (+9.7%), and Quebec (+9.1%). For the first quarter of 2025, cumulative home sales were down 6.3% compared to the same period in 2024. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-canada.pdf

4/23/2025

The Canadian economy ended 2024 strong. However, the escalating trade conflict is diminishing growth prospects. While tariffs are expected to increase price pressures, removing the consumer carbon tax has lowered energy prices. The unpredictability of US trade policy, and the speed and magnitude of the shifts, are making the economic outlook very uncertain. In February and March 2025, the United States repeatedly threatened, imposed and then suspended tariffs on Canada and Mexico. Significant US tariffs remain in place, particularly on steel, aluminum and motor vehicles. Then, on April 2, the United States announced high and broad-based tariffs on nearly all its other trading partners. One week later, on April 9, it reduced most of those tariffs for 90 days to a 10% universal rate. This universal tariff does not apply to Canada and Mexico. There is a great deal of uncertainty around what will happen next. Trade policy uncertainty is making it difficult for households, businesses and governments to plan. It is also difficult to know how the tariffs will affect the economy. Consequently, it is unusually challenging to project economic activity and consumer price index (CPI) inflation in Canada and globally. Instead of a base-case projection, this Report contains two illustrative scenarios that consider different US trade policies. In addition, the Risks section focuses on the uncertainty related to how tariffs will impact the economy. The Bank of Canada has chosen this approach to better manage the risks in this highly uncertain environment. https://www.bankofcanada.ca/publications/mpr/mpr-2025-04-16/

4/16/2025

The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%. The major shift in direction of US trade policy and the unpredictability of tariffs have increased uncertainty, diminished prospects for economic growth, and raised inflation expectations. Pervasive uncertainty makes it unusually challenging to project GDP growth and inflation in Canada and globally. Instead, the April Monetary Policy Report (MPR) presents two scenarios that explore different paths for US trade policy. In the first scenario, uncertainty is high but tariffs are limited in scope. Canadian growth weakens temporarily and inflation remains around the 2% target. In the second scenario, a protracted trade war causes Canadas economy to fall into recession this year and inflation rises temporarily above 3% next year. Many other trade policy scenarios are possible. There is also an unusual degree of uncertainty about the economic outcomes within any scenario, since the magnitude and speed of the shift in US trade policy are unprecedented. Global economic growth was solid in late 2024 and inflation has been easing towards central bank targets. However, tariffs and uncertainty have weakened the outlook. In the United States, the economy is showing signs of slowing amid rising policy uncertainty and rapidly deteriorating sentiment, while inflation expectations have risen. In the euro area, growth has been modest in early 2025, with continued weakness in the manufacturing sector. Chinas economy was strong at the end of 2024 but more recent data shows it slowing modestly. Financial markets have been roiled by serial tariff announcements, postponements and continued threats of escalation. This extreme market volatility is adding to uncertainty. Oil prices have declined substantially since January, mainly reflecting weaker prospects for global growth. Canadas exchange rate has recently appreciated as a result of broad US dollar weakness. https://www.bankofcanada.ca/2025/04/fad-press-release-2025-04-16/

4/11/2025

The Canadian Survey of Consumer Expectations was conducted through an online panel from January 29 to February 19, 2025. Follow-up phone interviews took place from February 20 to 25, 2025. This period was characterized by pervasive uncertainty created by the sudden and unpredictable shifts in US trade policy. Overview Overall, results of the first-quarter 2025 survey show that the escalating trade conflict with the United States is damaging consumer sentiment. Confidence in the labour market has weakened sharply. This is because many consumersnotably those working in sectors that are highly dependent on tradeare worried about losing their job. In this context, consumers have also become more pessimistic about their financial health. Although consumption plans had been improving over several quarters, consumers now intend to spend more cautiously given the uncertainty around the trade conflict. In addition, elevated housing costs and the high prices of many goods and services continued to weigh on households spending plans. Consumers expect the trade conflict to lead to a higher cost of living. This is reflected in their short-term inflation expectations, which rose in the first quarter of 2025. https://www.bankofcanada.ca/2025/04/canadian-survey-of-consumer-expectations-first-quarter-of-2025/

4/9/2025

By TD Economics The one-two punch of winter storms and tariff-related economic uncertainty sent a chill through Canadian housing markets in the first quarter. Were now tracking a double-digit quarterly decline in Canadian home sales and a mid-single digit drop in Canadian average home prices. These outcomes are much weaker than our pre-Trump inauguration forecast made in December, where we assumed that a loosening in federal mortgage rules, lower interest rates and continued economic growth would fuel a modest Q1 gain in sales and prices. This much softer starting point has us led to materially mark down our 2025 annual average growth forecasts for Canadian home sales and prices. Moving forward, its unlikely that activity will be as weak as it was in the first quarter. However, we still think that elevated uncertainty and a deteriorating jobs market will yield subdued sales and price growth for much of 2025. 2025 home price forecasts have been cut the most in B.C. and Ontario, where we now think that prices will decline in annual average terms this year. This reflects muted demand conditions in both markets and supply/demand balances that are heavily skewed in the favour of buyers. Of note, the GTA condo market is particularly soft, which will weigh on prices in Ontario this year. Elsewhere, 2025 quarterly price growth forecasts have been marked down to sub-trend levels in other parts of the country. Were retaining our view that quarterly price gains will outperform in the Prairies moving forward given relatively tight supply/demand balances and comparatively better affordability. An improving backdrop should set the stage for a notable rebound in home sales and average home prices in 2026. Specially, hiring should improve as were assuming a dialing back in tariff-related uncertainty . At the same time, interest rates should be at multi-year lows. These factors will facilitate the release of significant pent-up demand. However, the scale of bounce-back in Canadian average home prices will likely be restrained by poor affordability in key markets like B.C. and Ontario. https://economics.td.com/ca-provincial-housing-outlook

4/4/2025

Owning a home remains a critical source of wealth accumulation for many Canadian families, with real estate equity representing 42% of overall household wealth in 2023. The link between homeownership and wealth creation is even more pronounced for younger families, with housing assets accounting for nearly half of total wealth. As housing affordability deteriorated, the barriers to homeownership have become increasingly prohibitive, particularly for those without familial support. In 2019, 3 in 10 homeowners reported receiving an inheritance at a median value of $67,000, while 2 in 10 renters received a median value of $33,000. As home values appreciated strongly throughout the COVID-19 pandemic period, so too did inheritances for homeowners. By 2023, the median inheritance Canadian homeowners received had risen to $85,100. A looming wave of interfamilial wealth transfers is set to occur as baby boomers age, putting those with familial means in a more secure financial situation than those without. A wealth transfer in the form of an inheritance, whether from a living or deceased relative, is just one way many homeowners have benefited from familial support when entering the housing market. Other forms of assistance, such as receiving partial or full downpayment gifts, borrowing from family members rather than a bank, or receiving intergenerational property transfers, are also potentially important forms of familial support and are reported in Statistics Canadas Survey of Financial Security. Across all age cohorts, 5% of families were living in a home that was acquired in full or in part from a gift or an inheritance, and 9% reported that at least some of the downpayment for their home had been from a gift or an inheritance. When combined with those who borrowed from family and friends rather than a financial institution to purchase their home, the overall share of homeowners who benefited from an inheritance or other types of familial support to enter the housing market rose to 4 in 10. https://www150.statcan.gc.ca/n1/pub/36-28-0001/2025003/article/00001-eng.htm

4/2/2025

From Scotiabank HIGHLIGHTS Canadas housing market has been on a roller coaster ride since the pandemic as reflected by the profile for real private investment in residential structures, housing starts, sales and prices over this period. Housing affordability worsened significantly over this period with house prices reaching historical highs and mortgage rates increasing with the tightening in monetary policy since early 2022. Indeed, over this 5-year period home ownership affordability pressures have reached degrees like those witnessed in the early 1980s. Using Scotiabank Economics macro-econometric model of the Canadian and U.S. economies, we estimate that tightening supply constraints in construction from 2019Q3 to 2024Q4reflecting weakening productivity and rising construction material costsand above-normal population growth since 2022 each contributed to raise the benchmark MLS Home Price Index (HPI) a bit more than $50,000 over that 5-year period. This implies that if supply constraints had not tightened and population growth had stayed near its long-term average, the benchmark MLS HPI would have been slightly below $616,000 instead of the near $719,500 posted for 2024Q4. Our assessment and results strongly press the need to work on improving productivity to achieve housing affordability. Indeed, reducing bureaucratic burdens will also make housing supply more responsive to demand, thereby reducing price increases for a given rise in demand in the future. From 2024 to 2026, weaker population growth and uncertainty about trade barriers and their economic impact will reduce demand for homeownership. We forecast housing resale activity will slow in 2025 and 2026, declining from near 483,000 in 2024 to about 459,000 in 2026. Tight supply constraints will contribute to raise house prices especially in 2026 and mitigate progress on affordability from the past decline in interest rates and robust growth in real income. We expect the MLS House Price Index to rise by 0.4% in 2025 and 7% in 2026 with still-elevated supply constraints and pressure from the existing dwelling shortage. Of course, this expected profile for housing sales, starts and prices would be weaker if additional tariffs announced by the U.S. turn out more important than assumed in this forecast. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-note.housing-note--march-19-2025-.html

3/28/2025

Canadian Housing Survey shows women are more likely than men to be in core housing need. Overall, women were more likely to be in core housing need than men. Women experienced higher rates of core housing need in almost all age groups. However, the disparity was greatest between senior women and senior men over the age of 75. Racialized women had higher rates of core housing need than non-racialized women. Women-led, one-parent households had higher rates of core housing need than men-led, one-parent households. Women living alone not in a census family were more likely to be in core housing need than couples with and without children. Core housing need highlights the challenges many Canadians face in finding safe, suitable and affordable housing. Core housing need occurs when a household falls short of one or more housing standards adequacy, suitability or affordability and would need to spend 30% or more of its before-tax income to access housing that meets all 3 standards. Core housing need rates are often provided at the household level as the impact is felt by all individuals living in the household. According to the Canadian Housing Survey, approximately 1.7 million households (11.2%) were assessed to be in core housing need in 2022. This translates to approximately 3.3 million individuals (9.1%). https://www.cmhc-schl.gc.ca/blog/2025/core-housing-need-gender

3/26/2025

By TD Economics Weve slashed our real GDP growth forecasts for this year from coast-to-coast, reflecting the impact of the Canada-U.S. trade war. Solid Q1 activity across regions will buffer annual averages, but we foresee a mild recession unfolding for Canada in the middle-part of this year. Our forecast assumes that Canadas exports to the U.S. will face a 12.5% effective tariff rate for six months, lowered to 5% in Q4-2025 and held there through the projection horizon. We expect Canada to retaliate with their $155 billion package over the next two quarters before paring back to $30 billion. Across provinces, Quebec and Ontario are especially exposed to tariff risks given their outsized manufacturing sectors. However, Quebecs public sector is also quite large, and is less directly exposed. New Brunswick, meanwhile, is heavily reliant on the U.S. as an export destination. On the flipside, U.S.-bound shipments make up only a small share of GDP in Nova Scotia and B.C., while a lower 10% tariff on energy exports will likely soften the blow in Albertas case. The commodities backdrop, especially crude oil, is softening due to the prospect of slowing global demand growth. WTI prices have been revised lower, impacting profitability and investment in key resource-producing provinces. Our forecast builds in assumed support from government stimulus. So far, weve received budgets from Nova Scotia, B.C., and Alberta. For the most part, growth-supporting efforts have focused on infrastructure spending and allocating funds for trade-war related contingencies. Alberta, however, will roll out a sizeable tax cut for households this year. Provinces are also retaliating to through various measures, including the elimination of U.S. alcohol purchases. Weve downgraded our annual average housing forecasts for nearly every province this year (Newfoundland and Labrador gets a reprieve given solid momentum heading into 2025). Q1-25 performances were weak across most provinces. Part of this can be traced to severe winter storms in February, although tariff-related economic uncertainty is probably weighing. A subdued performance is likely in the cards for the bulk of 2025, before an improving jobs market, pent-up demand and waning uncertainty drives a better outcome in 2026. https://economics.td.com/provincial-economic-forecast

3/21/2025

Home sales dropped by 9.8% between January and February, the third monthly contraction in a row and the strongest decline since May 2022 when the Bank of Canada was tightening its monetary policy aggressively. On the supply side, new listings down 12.7% from January to February following a 14.8% jump the previous month. Active listings increased by 3.4% from January to February, the third monthly advance in a row. Combined with the decrease in sales, the number of months of inventory (active listings-to-sales) increased for the third consecutive month, jumping from 4.1 in January to 4.7 in February, its highest level since June 2019 (excluding Covid). Market conditions loosened sharply during the month and moved from tighter than their historical average to balanced. This was mainly due to a sharp softening in market conditions in Ontario and B.C., which are now in favourable to buyers territory. On the other hand, all other provinces are still showing tighter than average market conditions. Housing starts decreased by 4% (-10.3K) in February to 229.0K (seasonally adjusted and annualized), a print below the median economist forecast calling for 246K units. The monthly loss was driven by a decrease in urban starts (-10.3K to 209.8K) while rural starts were flat (at 19.2K). In urban centres, the regression was observed in the multi-unit segment (-9.8K to 166.5K), while starts edged down in the single-detached segment (-0.5K to 43.3K). The TeranetNational Bank Composite National House Price Index decreased by 0.1% from January to February after seasonal adjustment. Three of the 11 markets in the composite index were down during the month: Victoria (-1.4%), Vancouver (-0.9%) and Toronto (-0.5%). Conversely, prices rose in Halifax (+2.8%), Winnipeg (+0.9%), Montreal (+0.9%), Edmonton (+0.9%), Calgary (+0.8%), Quebec City (+0.6%), Ottawa-Gatineau (+0.3%) and Hamilton (+0.2%). https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-market.pdf

3/19/2025

Canadian home sales fell sharply from January to February, as home buyers remained on the sidelines in the first full month of the ongoing trade war with the United States. Sales activity recorded over Canadian MLS Systems dropped 9.8% month-over-month in February 2025, marking the lowest level for home sales since November 2023, and the largest month-over-month decline in activity since May 2022. The moment tariffs were first announced on January 20, a gap opened between home sales recorded this year and last. This trend continued to widen throughout February, leading to a significant, but hardly surprising, drop in monthly activity, said Shaun Cathcart, CREAs Senior Economist. This is already being reflected in renewed price softness, particularly in Ontarios Greater Golden Horseshoe region. Declines were broad-based, with sales falling in about three-quarters of all local markets and in almost all large markets. The trend was most pronounced in the Greater Toronto Area and surrounding Great Golden Horseshoe regions. February Highlights: National home sales dropped 9.8% month-over-month. Actual (not seasonally adjusted) monthly activity came in 10.4% below February 2024. The number of newly listed properties fell back 12.7% month-over-month. The MLS Home Price Index (HPI) declined 0.8% month-over-month and was down 1% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price fell 3.3% on a year-over-year basis. https://stats.crea.ca/en-CA/

3/14/2025

Decision Details: The Bank of Canada lowered its target for the overnight rate by 25 basis points to 2.75%, in line with a nearly unanimous consensus and market pricing. This is the 7th consecutive cut, bringing cumulative rate relief to 225 basis points since June 2024. At 2.75%, the policy rate is equal to the mid-point of the BoCs estimated neutral range (2.25% to 3.25%) The BoCs overnight target is now 175 basis points below the Feds upper bound policy target (the largest rate gap since 1997) As was the case in January, the Bank will set the deposit rate 5 basis points below the target rate (2.70%). The Bank rate will remain 25 basis points above the overnight target (3.00%). Rate Statement Opening to the Press Conference: Driving the decision to cut 25 bps was inflation close to 2% and pervasive uncertainty created by continuously changing US tariff threats. This is restraining consumers spending intentions and businesses plans to hire and invest. Note that in January, the Bank cited excess supply in the economy as contributing to that decision to ease. Theres no reference to excess supply or an output gap today. Not surprisingly, the Bank didnt commit to any particular rate path. However, theyve stressed that theyll have to proceed carefully with any further changes to our policy rate. Thats because there are upward pressures on inflation from higher costs along with the downward pressures from weaker demand.. The Bank notes that the economy entered 2025 in a solid position with robust GDP growth, stronger than their earlier assessment. That said, growth in Q1 will likely slow as the intensifying trade conflict weighs on sentiment and activity. Export growth, however, could come in strong as US importers front loaded orders ahead of tariffs. As for the labour market, the statement notes the hiring pick-up from November to January but acknowledged Februarys. They add there are warning signs that trade tensions could disrupt the job market recovery. On wage growth, they see signs of moderation. The Bank highlights that headline inflation is close to the 2% target. The federal tax holiday has muddied the inflation picture, but the Bank notes inflation will be around 2.5% after the tax break. Again, the statement downplays above-target core inflation measures which are occurring because of the persistence of shelter price inflation. The Bank also stressed that short-term inflation expectations have risen. In an accompanying release, the BoC provided insight into how Canadian businesses and households are reacting to the trade conflict. The report highlighted consumer spending caution (plans to defer large purchases and increase precautionary savings), job security worries (especially in industries directly relying on exports to the U.S.), and a subdued business outlook. The BoC highlighted that businesses are reducing hiring/investment plans on the basis of heightened trade uncertainty, while both consumers and businesses are expecting prices to increase over the next year. While the opening remarks to the presser mention that the economic activity impact from tariffs is largely yet to be seen, uncertainty is already weighing considerably on business and consumer intentions. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/boc-policy-monitor.pdf

3/12/2025

The Bank of Canada today reduced its target for the overnight rate to 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%. The Canadian economy entered 2025 in a solid position, with inflation close to the 2% target and robust GDP growth. However, heightened trade tensions and tariffs imposed by the United States will likely slow the pace of economic activity and increase inflationary pressures in Canada. The economic outlook continues to be subject to more-than-usual uncertainty because of the rapidly evolving policy landscape. After a period of solid growth, the US economy looks to have slowed in recent months. US inflation remains slightly above target. Economic growth in the euro zone was modest in late 2024. Chinas economy has posted strong gains, supported by government policies. Equity prices have fallen and bond yields have eased on market expectations of weaker North American growth. Oil prices have been volatile and are trading below the assumptions in the Banks January Monetary Policy Report (MPR). The Canadian dollar is broadly unchanged against the US dollar but weaker against other currencies. Canadas economy grew by 2.6% in the fourth quarter of 2024 following upwardly revised growth of 2.2% in the third quarter. This growth path is stronger than was expected at the time of the January MPR. Past cuts to interest rates have boosted economic activity, particularly consumption and housing. However, economic growth in the first quarter of 2025 will likely slow as the intensifying trade conflict weighs on sentiment and activity. Recent surveys suggest a sharp drop in consumer confidence and a slowdown in business spending as companies postpone or cancel investments. The negative impact of slowing domestic demand has been partially offset by a surge in exports in advance of tariffs being imposed. https://www.bankofcanada.ca/2025/03/fad-press-release-2025-03-12/

3/7/2025

New home prices continued slowdown in January The national index edged down 0.1% on a month-over-month basis in January, following the same decline in the previous month. Prices were unchanged in 15 out of the 27 surveyed census metropolitan areas (CMAs). Meanwhile, nine CMAs saw an increase, while three CMAs were down. Even though more CMAs recorded price increases in January, a decline was seen at the national level. This decrease was driven by Toronto (-0.4%), the largest new housing market in Canada, accounting for nearly one-quarter (23.6%) of the national weight. The largest month-over-month decrease of new home prices in January was recorded in Ottawa (-0.5%), followed by Toronto (-0.4%) and Edmonton (-0.2%). The weight of these three CMAs accounts for 38.8% of the national index. The latest new housing sales figures show a slowdown in the Ottawa and Toronto markets. Data collected from the Greater Ottawa Home Builders Association shows a 21.2% monthly decline in sales of new detached houses and townhouses in December 2024. In the case of Toronto, Altus Group reported a decline in new single-family home sales (-68.6%) in December 2024. The largest monthly increases in January 2025 were registered in Saskatoon (+0.6%) and St. CatharinesNiagara region (+0.6%), followed by Qubec (+0.5%) and Winnipeg (+0.4%). Reduced borrowing costs fuelled the demand for housing in the CMAs where prices were relatively more affordable. The Canada Mortgage and Housing Corporation reported declines in inventory of completed and unsold single-family homes in Qubec (-10.8%) and Winnipeg (-3.3%) in December 2024 compared to the previous month. https://www150.statcan.gc.ca/n1/daily-quotidien/250220/dq250220c-eng.htm

3/5/2025

With the second Bank of Canada (BoC) rate announcement this year around the corner on March 12, many Canadians are eager to see if the central bank will cut its lending rate again. In January, the BoC cut its lending rate by 25 basis points, bringing it down from 3.25% to 3%. So, is more rate relief on the way? According to TD Economist Derek Burleton, the BoC is likely to cut its lending rate at the upcoming announcement by 25 basis points. We are anticipating a follow-up cut in March, and TD Economics predicts the central bank will bring its lending rate down to 2.75%, Burleton said. Since the inflation data came out a few weeks ago, market odds of a cut fell as low as 30%, but have since jumped to 90% following the imposition of U.S. tariffs on Canadian exports. So, while theres still a chance that the central bank will announce a rate hold, there is a growing consensus that a cut is in store. Burleton explained that the Bank of Canada needs to help prepare for the economic risks on the horizon especially around tariffs. Even with recent reports showing a resilient job market and robust GDP growth in Canada, the central bank needs to ensure the economy is prepared for U.S. tariffs to hit Canadian exports, he said. https://stories.td.com/ca/en/article/will-bank-of-canada-cut-interest-rates-march-2025

2/28/2025

Overall, investment in building construction rose 1.9% (+$408.1 million) to $21.8 billion in December, with gains recorded across all components. The residential sector grew 2.2% to $15.1 billion while the non-residential sector was up 1.3% to $6.7 billion. Year over year, investment in building construction grew 4.7% in December. On a constant dollar basis (2017=100), investment in building construction increased 1.5% from the previous month to $13.0 billion in December and was up 1.6% year over year. Multi-unit component drives residential sector gains in December Investment in residential building construction was up 2.2% (+$323.9 million) to $15.1 billion in December. Single family home investment edged up 0.8% (+$60.7 million) to $7.3 billion in December, marking its fifth consecutive monthly increase. Investment in multi-unit construction rose 3.5% (+$263.2 million) to $7.7 billion in December, rebounding from two significant and consecutive monthly declines. https://www150.statcan.gc.ca/n1/daily-quotidien/250213/dq250213a-eng.htm

2/26/2025

Canadian MLS Systems posted a double-digit jump in new supply in January 2025 when compared to December 2024. At the same time, sales activity fell off at the end of the month, likely reflecting uncertainty over the potential for a trade war with the United States. Although sales were down 3.3% on a month-over-month basis in January, this was mostly the result of sales trailing off in the last week of the month. Meanwhile, the number of newly listed homes increased with an 11% jump compared to the final month of 2024. Aside from some of the wild swings seen during the pandemic, this was the largest seasonally adjusted monthly increase in new supply on record going back to the late 1980s. The standout trends to begin the year were a big jump in new supply at an uncommon time of year, as well as a weakening in sales which only showed up around the last week of January, said Shaun Cathcart, CREAs Senior Economist. The timing of that change in demand leaves little doubt as to the cause uncertainty around tariffs. Together with higher supply, this means markets that had been steadily tightening up since last fall are now suddenly in a softer pricing situation again, particularly in British Columbia and Ontario. https://www.crea.ca/media-hub/news/fourth-quarter-housing-data-hints-at-home-sales-rebound-for-2025-2/

2/21/2025

Summary Home sales decreased by 3.3% between December and January, the second monthly contraction in a row, which can be explained by a slowdown in transactions in the last week of January. On the supply side, new listings surged by 11.0% compared to December, the first increase in four months and the biggest jump since February 2022 (rebound following Omicron wave). Active listings jumped by 4.2% from December to January, the second monthly advance in a row. Combined with the decrease in sales, the number of months of inventory (active listings-to-sales) increased for the second consecutive month, moving from 3.9 in December to 4.2 in January. Market conditions loosened during the month but remained tighter than their historical average in most provinces, while they remained balanced in B.C. and were in favourable to buyers territory in Ontario. Housing starts increased by 3% (+7.2K) in January to 239.7K (seasonally adjusted and annualized), a print below the median economist forecast calling for 252.5K units. The monthly gain was driven by an increase in both urban (+5.6K to 220.6K) and rural (+1.7K to 19.1K) starts. Starts were up in Montreal (+17.8K to 31.4K), Toronto (+17.2K to 29.1K), and Calgary (+0.4K to 21.4K), while they were down in Vancouver (-4.1K to 25.0K) from December to January. On a provincial basis, starts were up the most in Quebec (+16.6K to 58.4K), Nova Scotia (+2.8K to 8.2K), Alberta (+1.4K to 44.8K), and P.E.I. (+1.2K to 2.5K), while they saw the biggest decrease in Ontario (-6.4K to 57.0K), B.C. (-6.5K to 39.0K) and New Brunswick (-3.1K to 1.7K). The TeranetNational Bank Composite National House Price Index remained stable from December to January after seasonal adjustment. Seven of the 11 markets in the composite index rose during the month: Quebec City (+3.2%), Halifax (+0.9%), Calgary (+0.8%), Ottawa-Gatineau (+0.6%), Victoria (+0.6%), Edmonton (+0.6%) and Montreal (+0.4%). Conversely, prices fell in Winnipeg (-1.5%), Hamilton (-1.4%) and Vancouver (-0.6%), while they remained stable in Toronto. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-market.pdf

2/19/2025

Canada Housing Market: Trade uncertainty weighed on housing markets in January ... and this is likely to continue in the foreseeable future National housing market conditions eased significantly in January 2025 with sales declining and new listings posting a near-record monthly rise. The national MLS House Price Index stayed essentially unchanged in January. Both declining sales and sharply rising new listings contributed to cool housing resales conditions nationally from December 2024 to January 2025. Over this period sales declined -3.3%, following a -5% decline from November to December. In January 2025, sales were only 2.9% above their level in the same month of 2024. But from the CREA report, the sales decline in January came mostly from a weak performance in its last week, the period where uncertainty on the new U.S. administration tariff policy started flying high. New listings climbed 11% from December to January and their level was at an historical high, excluding the very volatile initial 12-month period of the pandemic. In terms of their monthly progression, new listings posted the second largest historical increase in January (again outside the above-mentioned pandemic period), after the one observed in February 2022 (+21.4%) when house prices were at their historical summit and just before the Bank of Canada and other central banks started hiking their policy rate. This monetary policy tightening led to the subsequent cooling in Canadas economic and housing market conditions and house prices declining. With sales declining and new listings rising, the national sales-to-new listings ratio cooled further and significantly from December to January, declining from 56.5% to 49.3% over this period. This indicator of market pressures is now below the mid-point of our estimated balanced conditions zone (of between 44.7% to 66.1%). Another indicator of national market pressures, months of inventory, also eased from December to January, increasing from 3.9 to 4.2 months over this period nationally, but was still below its long-term pre-pandemic average of 5.2 months. All provinces witnessed an increase in their months of inventory from December to January, except for Saskatchewan where it was unchanged and for Newfoundland and Labrador where it declined (from 5.5 to 4.3 months). https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-news-flash.february-18--2025.html

2/14/2025

On average, the cost of finding love can add up to $3,621 One third of couples say spending is a source of conflict in the relationship A special Valentines Day report from the BMO Real Financial Progress Index reveals 56% of Canadians say the rising cost of living is affecting dating, with many going on fewer dates and/or planning less expensive dating activities. The survey explores how concerns about the economy and personal finances have affected approaches to dating and relationships and found 42% of single Canadians admitted to adjusting their plans for a date for financial reasons. Nearly a third (30%) of single Canadians have cancelled a date to save money. Canadians on average spend $173 for each date, including the cost for transportation, preparation such as grooming and attire, and expenses such as food, beverages and tickets. On average, partnered Canadians have gone on 10 to 21 dates before committing to a relationship, suggesting Canadians could spend up to $3,621 on dates before making a relationship official. https://newsroom.bmo.com/2025-02-06-BMO-Survey-Rising-Cost-of-Living-is-Affecting-Dating

2/12/2025

From CMHC High housing costs burden Canadians in many ways. Here, we concentrate on how these costs discourage Canadians from moving to better places to live and to the cities where they would like to work. Improving affordability will hence boost the productivity of Canadas economy. When choosing where to live and work, Canadians not only look at the wage increase they might get. They must be realistic about housing costs if they have to move to a new location. And they may give up on opportunities given by a new job that improves their skills and knowledge and hence the productivity of the country if they cant afford to cover the cost of housing after moving. Similarly, employers must pay more to attract highly skilled workers to their locations to cover those workers higher cost of living. This raises costs and lowers productivity. Changes in housing affordability across the country lead to knock-on changes for other cities. For example, our modelling suggests that were Toronto to double its housing starts over the next decade to address its own affordability challenges but without policy changes its population would be 3% greater than currently projected. Others, mostly from the rest of Ontario, would be attracted there. More generally, we find that a 1% increase in house prices in the destination city will make it less attractive and will lead to a decline in the number of people moving there of a little more than 1%. Cities need to understand the impacts of house prices across the country when planning for their own growth. https://www.cmhc-schl.gc.ca/blog/2025/high-housing-costs-making-harder-move-jobs-many-seeking

2/7/2025

From CMHC Highlights Foreign trade risks and immigration changes add significant uncertainty to the outlook. We expect economic activity to be modest in 2025, picking up in 2026 and 2027. Housing starts will slow down from 2025 to 2027 mainly due to fewer condominium apartments being built but total starts will remain above their 10-year average. Rental apartment construction will remain high but may slow in 2027 as demand eases. Ground-oriented homes (detached, semi-detached, row homes) may recover slightly, especially in more affordable options like row houses. We expect housing sales and prices to rebound as lower mortgage rates and changes to mortgage rules unlock pent-up demand in the short term. In the longer term, stronger economic fundamentals will support this rebound. The recovery will be uneven, with slower progress in less affordable regions and in the condominium apartment market. Rental markets are expected to ease with higher vacancy rates slowing rent growth. Renter affordability will improve gradually, with more noticeable changes happening later in the forecast period. https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/housing-market/housing-market-outlook?utm_medium=emailutm_source=email-e-blastutm_campaign=2025-01-housing_market_outlook_2025

2/5/2025

Highlights In 2021, 1.65 million households comprised of roommates or extended family sharing living space. These households were about evenly split between those with roommates and those with extended family, each group representing about 800,000 households. One in five households with roommates or extended family members (21.7%) was living in a crowded dwelling, compared with 3.4% of other households. In contrast, households with roommates or extended family members (16.7%) were less likely to be in unaffordable housing than other households (21.5%). About 900,000 people lived with extended family without contributing to housing costs, and almost half (47.5%) of them had no income or an income of less than $30,000. Just under 400,000 people lived with non-relatives without contributing to housing costs, and over one-third (36.6%) of them were living in poverty. Estimates of the number of people in shared housing experiencing housing instability or unmet housing need varied depending on the criteria used to define these concepts. One estimate suggested that 71,000 people had several risk factors for housing instability or unmet housing need, including living with non-relatives, not contributing to housing costs, having an income of less than $30,000 or living in poverty, and residing in a crowded dwelling. Another estimate indicated that just under 1.7 million people could be experiencing housing instability or unmet housing need when defined solely by living in a crowded dwelling. https://www150.statcan.gc.ca/n1/pub/46-28-0001/2025001/article/00001-eng.htm

1/31/2025

As widely expected, the Bank of Canada lowered its target for the overnight rate by 25 basis points to 3.0%. This sixth consecutive cut brings cumulative rate relief to 200 basis points since June 2024 and pushes the BoCs overnight target 150 bps below the Feds. The last time this gap was larger was way back in 1997. Note that the Bank will also be setting the deposit rate 5 bps below the target, a move designed to relieve some of the upward pressure on CORRA. Consistent with Toni Gravelles speech earlier this month, the Bank announced an end to QT with asset purchases (term repos) starting in early March. Initial term repo sizes will range between $2 billion and $5 billion. Here are some additional highlights from the communique and the opening statement to the press conference: Driving the decision to cut 25 bps was inflation around 2% and an economy in excess supply. As for forward rate guidance, you really wont find any. The opening statement to the presser simply acknowledges the tightrope theyll be walking: We will need to carefully assess the downward pressure on inflation from weakness in the economy, and weigh that against the upward pressure on inflation from higher input prices and supply chain disruptions. Absent tariff action, the BoC expects GDP growth to strengthen in 2025 (vs. 2024) with growth a bit above potential this year. Again, ignoring tariff threats, upside and downside risks are reasonably balanced. As for the labour market, the statement reiterates that Canadas labour market remains soft although they acknowledge job growth is picking up. On wage growth, they see some signs of easing. The Bank highlights that headline inflation is close to 2% with some volatility associated with the GST/HST holiday. Highlighting a broad range of indicators they note that underlying inflation is also close to 2% and is forecast to stay there over the next two years (absent tariffs). Note that the relatively hotter CPI-Median and -Trim werent mentioned. As for recent Canadian dollar weakness, the rate statement attributes it mostly to trade uncertainty and broader strength in the USD. In other words, its less to do with BoC-Fed divergence. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/boc-policy-monitor.pdf

1/29/2025

The Bank of Canada today reduced its target for the overnight rate to 3%, with the Bank Rate at 3.25% and the deposit rate at 2.95%. The Bank is also announcing its plan to complete the normalization of its balance sheet, ending quantitative tightening. The Bank will restart asset purchases in early March, beginning gradually so that its balance sheet stabilizes and then grows modestly, in line with growth in the economy. Projections in the January Monetary Policy Report (MPR) published today are subject to more-than-usual uncertainty because of the rapidly evolving policy landscape, particularly the threat of trade tariffs by the new administration in the United States. Since the scope and duration of a possible trade conflict are impossible to predict, this MPR provides a baseline forecast in the absence of new tariffs. In the MPR projection, the global economy is expected to continue growing by about 3% over the next two years. Growth in the United States has been revised up, mainly due to stronger consumption. Growth in the euro area is likely to be subdued as the region copes with competitiveness pressures. In China, recent policy actions are boosting demand and supporting near-term growth, although structural challenges remain. Since October, financial conditions have diverged across countries. US bond yields have risen, supported by strong growth and more persistent inflation. In contrast, yields in Canada are down slightly. The Canadian dollar has depreciated materially against the US dollar, largely reflecting trade uncertainty and broader strength in the US currency. Oil prices have been volatile and in recent weeks have been about $5 higher than was assumed in the October MPR. In Canada, past cuts to interest rates have started to boost the economy. The recent strengthening in both consumption and housing activity is expected to continue. However, business investment remains weak. The outlook for exports is being supported by new export capacity for oil and gas. https://www.bankofcanada.ca/2025/01/fad-press-release-2025-01-29/

1/24/2025

The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity and average home prices via the Multiple Listing Service (MLS) Systems of Canadian real estate boards and associations and expanded the outlook to include 2026. CREAs latest forecast is little changed from the fall 2024 outlook. The assumption remains that the combination of two and a half years of pent-up demand and lower borrowing costs, together with the usual burst of spring listings will lead to a rebound in market activity across the country in 2025. There was a good preview of what that might look like during the fourth quarter of 2024. In addition to lower mortgage rates, the expectation the Bank of Canada may soon signal that interest rates are about as low as they are likely to go in this easing cycle could spur even more demand from those who have been waiting for the right time to lock in a fixed-rate mortgage. This rebound in demand is expected to play out differently across Canada, with British Columbia and Ontario expected to see bigger rebounds on the sales side owing to how low sales are there currently, together with more plentiful inventories, and less scope for price gains in these already expensive parts of the country. By contrast, increased demand is expected to play out more on the price side in Alberta and Saskatchewan where sales were already near record levels in 2024, inventories are currently near-20-year lows, and prices are still relatively more affordable. Manitoba, Quebec, and the Atlantic provinces are all expected to fall between these extremes, with both more sales and higher prices in 2025. https://www.crea.ca/housing-market-stats/canadian-housing-market-stats/quarterly-forecasts/

1/22/2025

CANADA HOUSING MARKET: YEAR IN REVIEW Canadas national housing market slowed down to close 2024. National sales fell 5.8% (sa m/m) in December. New listings continued to pull back, dropping for the third month in a row by 1.7%. National sales in December of 2024 were 19% higher than the same month in 2023; new listings were 10% higher. Despite Decembers decline, sales in the last quarter of the year were 10% above the previous quarter. The larger decline in sales relative to listings meant the sales-to-new listing ratio, a measure of the markets tightness relative to historical averages and deviations, eased again after relatively steep increases the prior two months. The ratio stood at 56.9% in December, down from Novembers 59.3% and only slightly above the mid-point of the balanced conditions zone (estimated between 44.7% and 66.1%). Months of inventory also signalled easing following the national market moves in December, climbing up to 3.9 from Novembers recent low of 3.6, but still below its long-term average of 5 months of inventory. However, according to CREA, Decembers 3.9 is within the lower range for a balanced market based on one standard deviation, making anything below 3.6 months within buyers territory. The year as a whole recorded 7.3% more sales than in 2023, 11.2% more listings, and 0.9% higher average selling pricethe opposite of the 2023 tally that saw all measures below their prior year average. The only exception is the sales-to-new listings ratio, which continued to ease from its 2021 peak of 77.9%. Sales in 2024 were just -0.1% below their 201019 annual average, while listings were 2.6% above. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-news-flash.january-15--2025.html

1/16/2025

With much of the early fall surge of supply having now been picked over, home sales activity recorded over Canadian MLS Systems dipped in December 2024. Sales were down 5.8% compared to November, but still stand 13% above where they were in May, just before the first interest rate cut by the Bank of Canada in early June. The fourth quarter of 2024 saw sales up 10% from the third quarter and stood among the stronger quarters for activity in the last 20 years, not accounting for the pandemic. The number of homes sold across Canada declined in December compared to a stronger October and November, although that was likely more of a supply story than a demand story, said Shaun Cathcart, CREAs Senior Economist. Our forecast continues to be for a significant unleashing of demand in the spring of 2025, with the expected bottom for interest rates coinciding with sellers listing properties for sale in big numbers once the snow melts. December Highlights: National home sales fell 5.8% month-over-month. Actual (not seasonally adjusted) monthly activity came in 19.2% above December 2023. The number of newly listed properties dipped 1.7% month-over-month. The MLS Home Price Index (HPI) climbed 0.3% month-over-month and was only down 0.2% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price was up 2.5% on a year-over-year basis. https://www.crea.ca/media-hub/news/fourth-quarter-housing-data-hints-at-home-sales-rebound-for-2025/

1/10/2025

Summary Home sales increased 2.8% between October and November, a fourth consecutive monthly gain that follows a 6.8% jump in October. On the supply side, new listings decreased by 0.5% compared to October, the second monthly decline in a row. Active listings remained stable from October to November. With the increase in sales, the number of months of inventory (active listings-to-sales) decreased for a fourth month in a row, moving from 3.8 in October to 3.7 in November. Market conditions tightened during the month and were tighter than their historical average in most provinces, while they remained roughly balanced in B.C. and Ontario. Housing starts increased 8% (+20.2K) in November to 262.4K (seasonally adjusted and annualized), beating the median economist forecast which called for a 245.1K print. Octobers figure was also revised up slightly by 1.4K to 242.2K. The monthly increase was driven by a rise in urban starts (+20.6K to 245K), which was mainly supported by an 11% increase in the multi-unit segment (to 195.3K). Meanwhile, single-detached urban starts increased 1.8K to 49.8K. Starts were down in Toronto (-2.7K to 26.7K) and Calgary (-1.5K to 30.1K), but up in Montreal (+14.9K to 31.3K) and Vancouver (+1.6K to 32.0K) during November. At the provincial level, the most notable increased were registered in Nova Scotia (+1.4K to 5.6K), New Brunswick (+1.4K to 6.1K), Quebec (+10.7K to 53.3K), and British Columbia (+8.1K to 48.6K). On the other hand, declines were seen in P.E.I (-88% on the month, or -1.1K to 158), Manitoba (-1.2K to 7.1K), and Ontario (-5.3K to 59.4K). The TeranetNational Bank Composite National House Price Index by 0.6% from October to November after adjustment for seasonal effects. Ten of the 11 markets in the composite index were up during the month: Quebec City (+2.2%), Halifax (+1.7%), Hamilton (+1.5%), Montreal (+1.3%), Vancouver (+1.2%), Victoria (+0.9%), Winnipeg (+0.9%), Ottawa-Gatineau (+0.4%), Calgary (+0.3%) and Toronto (+0.1%). Conversely, there was a decline in Edmonton (-0.8%). https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-market.pdf

1/8/2025

Highlights Rental market conditions across Canadas large urban centres remained tight despite lessening market pressures in some centres due to record level growth in supply outpacing strong demand. The average vacancy rate for purpose-built rental apartments1 rose to 2.2% in 2024 from 1.5% in 2023, remaining below the 10-year historical average of 2.7%. Average rent growth slowed, with rents for 2-bedroom units rising by 5.4%2, down from the record 8.0% in 2023. Rents increased by 23.5% when units turned over, which is close to 2023 rates. Rent hikes on turnover units accounted for more than 40% of the overall rent increase. Despite the slowdown in rent growth, renter affordability remained strained. The increase in rental stock was driven by newly completed, higher-priced units, which were unaffordable for many renters and primarily served higher-income households. https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/rental-market-reports-major-centres

1/3/2025

From Scotiabank All Canadian provinces are poised for better growth in 2025, despite anticipating stronger policy headwinds in late 2025 and 2026 from both domestic and international fronts. Consumption is expected to accelerate over the next few quarters, driven by the Bank of Canadas rate cuts, which will alleviate household financial pressures, further supported by excess savings and fiscal stimulus. Residential investment is set to surge, fueled by lower financing costs and robust demand in an under-supplied market, driving economic expansion as we enter the new year. The rebound in interest rate-sensitive sectors, while beneficial for all provinces, is particularly promising for Ontario and British Columbia (B.C.), which have experienced notable contractions in housing activities. Policy uncertainty from the new U.S. administration poses a significant risk. Despite the lack of clarity on the path ahead, we have made some attempt to incorporate potential policy changes in our current forecast. Household spending is set to accelerate in 2025, driven by the Bank of Canadas rate cuts, elevated savings, and fiscal stimulus. Consumption held up solidly over the course of this year and has shown signs of picking up in the third quarter, surpassing expectations. Posting strong headline gains in the second half of this year, retail sales data highlights exceptional strength in the Atlantic provinces, although B.C. and Ontario experienced some soft patches. Despite the continued drag from ongoing mortgage resets, households should be able to manage higher mortgage payments by adapting saving and spending habits. As interest rates decline, this impact will also ease, paving the way for increased consumption. We anticipate a broad-based surge in household spending, fueled by stimulus cheques from Ontario and eventually B.C., as well as the federal government, GST/HST cuts, and mortgage rule changes as we move into 2025. This combination of factors sets the stage for a rebound in growth, with consumer confidence and spending power on the rise. Strong labour market conditions support consumption growth. After a period of cooling since the latter half of last year, employment growth stabilized and remained steady throughout 2024. However, employment gains have consistently lagged behind the rapid expansion of the labour force, driving up unemployment rates nationwide. This cooling trend is particularly evident in Quebec and Ontario, where employment growth slowed sharply, though recent signs of stabilization and recovery have begun to emerge. In Alberta, job gains have shown signs of weakening despite rapid population growth, following strong outperformance up until early this year. The Atlantic provinces have bucked the trend, with robust job gains outpacing strong labour force growth, indicating remarkable economic momentum. We anticipate that the worst of the unemployment rate deterioration is behind us and expect unemployment rates to stabilize around levels just above the non-accelerating inflation rate of unemployment (NAIRU) over the next few quarters. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.the-provinces.scotiabank-s-provincial-outlook--december-17--2024-.html

12/20/2024

Canadians increasingly aware of FHSA features and benefits. Homebuyers divided over how mortgage rate changes will affect their ability to buy a home in the next two years. 23% of parents are expected to use the FHSA to help their children save for a home. BMOs 15th annual Investment Survey reveals more than half (56%) of potential first-time homebuyers are planning to use the First Home Savings Account (FHSA) to help purchase their first home, up from 52% from 2023. The annual survey also finds the understanding of FHSAs is increasing and that parents are finding the FHSA an effective way to help their adult children save for a home. Mind The Knowledge Gap The FHSA knowledge gap is narrowing, with two fifths (40%) of Canadians indicating they have at least some knowledge of the account, up from 31% from last year. Nearly half (48%) of Gen Z are knowledgeable about the FHSAs features and benefits the highest among any age group. A (Tax-Free) Gift That Keeps on Giving The BMO Investment Survey also explores how families across generations may be using the FHSA as a financial gift for their children. Nearly a quarter (23%) of parents will likely use the FHSA to help their adult children save for their first home. Younger parents are also more likely to use the FHSA to help their adult children save for a home, according to the surveys findings: Millennial Parents: 42% Gen Z Parents: 21% Boomer Parents: 7% It is encouraging to see that over half of prospective buyers plan to use the First Home Savings Account to save, and we want to see that number grow because the FHSA is such a powerful tool. Benefits including the ability to make tax-deducible contributions, tax-free growth of the investments and the ability to hold various investment types make this plan the most advantageous way to save for a home. It is like an RRSP and TFSA rolled into one for first-time homebuyers, said Nicole Ow, Vice President and Head, Retail Investments, BMO. For most, buying their first home will be part of a multi-year plan, involving several savings vehicles like the FHSA, RRSP withdrawals through the Home Buyers Plan, and may also involve multiple generations, with parents and grandparents contributing financially. https://newsroom.bmo.com/2024-12-18-BMO-Investment-Survey-Over-Half-of-First-Time-Homebuyers-Plan-to-Use-First-Home-Savings-Account-FHSA-to-Buy-a-Home

12/18/2024

2024 is playing out largely as expected across Canadas regional landscape, with most of the Prairie and Atlantic provinces leading economic growth while Ontario, B.C., and Quebec lag. A number of regions are capping off this year displaying moderately stronger momentum in economic growth and job creation than we had envisaged in September. However, any upgrades to 2025 provincial growth forecasts reflecting this positive hand-off have been neutralized by downside growth risks on Canada owing to the imposition of tariffs by the new U.S. administration. The president-elect has threatened to impose a 25% across-the-board tariff on Canadian exports. We assume that Canada will manage to avert this outcome, partly reflecting the energy-heavy nature of its exports to the U.S. Still, this regional forecast incorporates some chill to investment and hiring due to the tariff threat that is likely to linger. Importantly, no province would escape the fallout from a Canada/U.S. trade skirmish, with U.S. export exposure ranging from about 80-90% in Alberta, New Brunswick, and Ontario to a still-lofty 50-60% in B.C and Saskatchewan. Beyond the first-order effects from tariffs on exports, provinces would also feel the hit through damage to other trading partners. PEI, Saskatchewan, and Manitoba source a comparatively large share of their imports from the U.S., potentially leaving them exposed to inflation pressures should Canada impose tariffs of its own. The countrys population growth is set to stall over the next two years through planned reductions in both the pool of non-permanent residents (NPRs) and a scaling back in its annual permanent immigration targets. Ontario, B.C. and Quebec will likely see population growth pull back the fastest. Meanwhile, ongoing affordability advantages in the Prairies and some Maritime provinces will remain a lure for interprovincial migrants. A wave of federal government stimulus is set to reach Canadian consumers in the coming months, with Ontario set to roll out its own measure in the new year. Combined with ongoing interest rate reductions, we expect consumer spending growth to pick up across the provinces despite slower population growth. Provinces with the highest debt burdens, namely B.C., Ontario, and Alberta, should disproportionately benefit from easing conditions. Housing markets across the country are also poised to benefit from supportive federal measures, and gradually falling short-term interest rates. https://economics.td.com/provincial-economic-forecast

12/13/2024

The Bank of Canada lowered the target for the overnight rate by 50 basis points for the second straight meeting, a decision in line with consensus and market expectations. This is the fifth rate reduction in as many meetings and brings the policy rate to 3.25%, or the upper end of the BoCs estimated neutral range (2.25% to 3.25%). The move also pushes the BoCs policy rate 150 bps below the Federal Reserves upper bound target, the most since 1997 (although that gap will likely narrow next week). Meanwhile, balance sheet normalization will continue as expected. Here are additional highlights from the communique and the opening statement to the press conference: Driving the decision to cut 50 bps was inflation around 2%, excess supply and softer growth ahead relative to earlier expectations. Macklem added in the opening statement to the press conference that monetary policy no longer needs to be clearly in restrictive territory. As for forward rate guidance, the press release notes we will be evaluating the need for further reductions in the policy rate one decision at a time. In the presser, Macklem said they expect a more gradual approach to monetary policy if the economy evolves broadly as expected. Note they no longer explicitly say they expect to cut their policy rate further. The statement notes that Q3 growth was somewhat below the Banks projection and Q4 growth looks weaker than projected. Slower immigration will ease growth in 2025 while proposed fiscal measures will support demand. They will look through temporary demand effects. The press release highlights that job growth continues to grow slower than labour supply. Wage growth showed some signs of easing, but remains elevated relative to productivity. As for inflation, they still expect CPI to hover around 2% for the next couple of years. They note that the GST holiday will temporarily lower inflation but that will be unwound once the holiday ends. Therefore, watching core inflation will be critical to see underlying trends. The Bank didnt have much to say on tariff threats other than noting that these have increased uncertainty and clouded the economic outlook. \ https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/boc-policy-monitor.pdf

12/11/2024

The Bank of Canada today reduced its target for the overnight rate to 3%, with the Bank Rate at 3% and the deposit rate at 3%. The Bank is continuing its policy of balance sheet normalization. The global economy is evolving largely as expected in the Banks October Monetary Policy Report (MPR). In the United States, the economy continues to show broad-based strength, with robust consumption and a solid labour market. US inflation has been holding steady, with some price pressures persisting. In the euro area, recent indicators point to weaker growth. In China, recent policy actions combined with strong exports are supporting growth, but household spending remains subdued. Global financial conditions have eased and the Canadian dollar has depreciated in the face of broad-based strength in the US dollar. In Canada, the economy grew by 1% in the third quarter, somewhat below the Banks October projection, and the fourth quarter also looks weaker than projected. Third-quarter GDP growth was pulled down by business investment, inventories and exports. In contrast, consumer spending and housing activity both picked up, suggesting lower interest rates are beginning to boost household spending. Historical revisions to the National Accounts have increased the level of GDP over the past three years, largely reflecting higher investment and consumption. The unemployment rate rose to 6.8% in November as employment continued to grow more slowly than the labour force. Wage growth showed some signs of easing, but remains elevated relative to productivity. https://www.bankofcanada.ca/2024/12/fad-press-release-2024-12-11/

12/4/2024

From Scotiabank There are many uncertainties about the economic outlook as President Trump is set to take the helm of the United States. Those range from uncertainty about the policy actions he will take to uncertainty about the impact of those very policies. A case in point is the recent statement that he would implement tariffs hikes of 25% on all imports from Canada and Mexico, and 10% on imports from China. While we do not believe these tariffs will be implemented (see here), it is very likely that over the next several months, economic forecasts will need to present some alternative paths for the economy around a central scenario. Those alternative scenarios are likely to represent choices made by forecasters as to which policy assumption to include in their forecasts. Only when policy measures will actually be announced and implemented will uncertainty around the policy environment diminish. Given its critical nature to Canada and other trading partners, and to the U.S. itself of course, we thought it would be helpful to provide some rough rules of thumb for estimating the impact of trade policy changes on Canada and the U.S. These rules of thumb, derived from our macroeconometric model of the U.S. and Canadian economies, while by no means meant to be exact, are designed to help provide a quick and dirty assessment of the impact of changes in tariffs on the economy, inflation, and interest rates in both countries. Click to read more https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.insights-views.tariffs--november-28--2024-.html

11/21/2024

Home sales activity recorded over Canadian MLS Systems increased 7.7% on a month-over-month basis in October 2024, reaching its highest level since April 2022. Rising home sales activity was broad based, with the Greater Toronto Area (GTA) and British Columbias Lower Mainland recording double-digit increases in October. The jump in home sales last month was definitely an October surprise, although with the big interest rate cut of 50 basis points announced during the last week of the month, the increase was more likely related to the surge in new listings we saw in September, said Shaun Cathcart, CREAs Senior Economist. There probably wont be another rush of new supply like that until next spring, and at that point, mortgage rates should be close to their expected lows, as well. With that in mind, you can think of the October numbers as a sort of preview for what we might expect to see next year. New listings posted a 3.5% month-over-month decline in October, although that followed on the heels of a 4.8% jump in September, so new supply remains at some of the highest levels since mid-2022. The national pullback in October was led by a drop in new supply in the GTA. With sales rising considerably in October and new listings falling, the national sales-to-new listings ratio tightened to 58%, up from 52% in September. The long-term average for the national sales-to-new listings ratio is 55%, with a sales-to-new listings ratio between 45% and 65% generally consistent with balanced housing market conditions. https://stats.crea.ca/en-CA/

11/18/2024

Condominium apartments are the most common type of property owned by investors in census metropolitan areas (CMAs) like Toronto and Vancouver. In 2022, nearly two in five condominium apartments (38.9%) in the Toronto CMA were investment properties, while this was the case for about one in three (34.2%) in the Vancouver CMA. In these CMAs, new condominium apartment projects often rely on presales to investors to be built. Investors buy pre-construction units with the goal of making a profit when the buildings are completeeither by renting them out or by selling the unit at a higher price. These pre-construction sales are used by developers to secure financing for the projects. This dynamic means that investor preferences may have an influence on the type of buildings that get built. One concern with this process is that it may lead to the construction of more properties with smaller units. Investors are perceived to prefer these units because rent per square foot of living area tends to be higher for smaller units. This may have contributed to the shrinking size of condominium apartments in CMAs. For example, in the Toronto CMA, the median living area of condominium apartments built in the 1990s was 947 square feet, compared with 640 square feet for those built after 2016. In the Vancouver CMA, the median size also declined over the same period, from 912 square feet to 790. https://www150.statcan.gc.ca/n1/daily-quotidien/241003/dq241003a-eng.htm

11/6/2024

HIGHLIGHTS Renewal risk remains as 1.2 million mortgages will come up for renewal in 2025. Most of these will experience higher interest rates than when their term began: 85% of those were contracted when the Bank of Canada rate was at or below 1%. The mortgage delinquency rate continued to rise from historic low levels in 2024, reaching 0.19% in the second quarter, with delinquency rates on other credit products, and allowances for expected credit losses both suggesting it will continue to increase through 2025. However, this remains below pre-pandemic levels and well below averages since 1990. Traditional lenders experienced two very different quarters to begin 2024. The first quarter showed higher risk lending compared to 2023, but in the second quarter newly extended mortgages had lower risk based on traditional risk metrics. Overall mortgage debt increased to $2.2 trillion in July 2024, which exacerbates the vulnerability of elevated household debt. This growth (3.5% year-over-year) is below recent averages, but lower interest rates could accelerate the increase. Alternative lenders saw an increase in lending during the first quarter of this year compared to the fourth quarter of 2023, indicating renewed momentum to sustain their market share from a year ago. However, their risk profile has increased compared to last year. Mortgages with terms of three or more years but less than five years are the most popular, with over half of new mortgages having terms in this range. The traditional five-year, fixed-rate mortgage and variable rate mortgage both represent a small share of the newly extended loans. https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/housing-research/research-reports/housing-finance/residential-mortgage-industry-report/2024/residential-mortgage-industry-report-fall-2024-en.pdf

11/1/2024

The BMO Real Financial Progress Index reveals that amid growing concerns about the cost of living (54%) and their overall financial situation (36%) 79% of Canadians are planning to cut back on spending this holiday season. The surveys insights provide an outlook on Canadians holiday spending plans, including: The holiday price tag: On average, Canadians plan on spending more than $1,991 this holiday season, including travel ($1,802), holiday gifts ($519), entertaining ($295), decorations ($141) and other holiday expenses ($275). Nearly a quarter (23%) plan on spending more than $2,000 during the holidays. Making a list and checking it twice: 79% plan on buying fewer gifts this year, and over a quarter (27%) will cut down the number of people on their gift list. More than a third (36%) plan on buying less expensive gifts. Sleighing spending: 41% are spending less on fewer gifts, and 44% had cut back on spending on other occasions, including birthdays and anniversaries, throughout the year in order to spend more on holiday gifts. Nearly half (49%) admit to spending more than they know they should. https://about.bmo.com/consumers-plan-to-spend-less-this-holiday-season-heres-how-bmo-can-help-make-holiday-budgeting-easier/

10/30/2024

Report by TD Economics Highlights On December 15th, the federal government will roll out mortgage rule changes that make it easier to purchase a home for those taking out insured mortgages. These measures should offer a lift to Canadian home sales and prices next year. However, their impact will be blunted by an array of factors, including the affordability erosion induced by their implementation. Mitigating the impacts of these policies may be positive from a financial stability perspective, as the measures will likely encourage households to take on more debt at a longer term, and insured borrowers have typically been more prone to bouts of financial stress. The federal government has recently announced two changes to Canadian mortgage rules (effective December 15th, 2024) that will make it easier to qualify for purchasing a home. As the surge in home sales early in 2024 (amid a steep drop in bond yields at the end of last year) and in the spring of 2023 (after the Bank of Canada paused its rate hiking campaign) taught us, Canadian housing market activity can be highly reactive. Yet, we dont think that these measures alone will unleash a housing boom. Instead, theyll likely offer a secondary tailwind to a market thats already gaining decent traction in 2025 on the back of lower borrowing costs and a gradually improving economy (see here). Whats more, the affordability boost offered by these measures will likely also erode as home prices are raised by their implementation, thereby limiting their effectiveness. https://economics.td.com/ca-mortgage-rule-changes

10/25/2024

Rate Statement The rate cutting cycle was turned up a notch as the Bank of Canada lowered its target for the overnight rate by 50 basis points to 3.75%, a decision in line with consensus and market expectations. This fourth cut in as many meetings marks a cumulative rate reduction of 125 basis points and brings the policy rate to its lowest point since December 2022. The move also pushes the BoCs policy rate 125 basis points below the Federal Reserves, though an expected November Fed cut would narrow that gap. Meanwhile, balance sheet normalization will continue as expected. Here are some additional highlights from the communique and the opening statement to the press conference: Driving the decision to cut 50 bps was a desire to support economic growth and to keep inflation close to the middle of the 1% to 3% range. As for forward rate guidance, the Bank says, we expect to reduce the policy rate further if the economy evolves broadly in line with our latest forecast. As always, the timing and pace of further cuts, will be guided by incoming information. Despite recent soft data, the Bank still expects relatively solid GDP growth ahead: GDP growth is forecast to strengthen gradually over the projection horizon, supported by lower interest rates. The Bank appears to be looking the strength of the September jobs report, as the statement simply says the labour market remains soft. Still, they note that wage growth remains elevated relative to productivity growth. The Bank highlights that inflation has declined significantly thanks to excess supply in the economy. The breadth of price increases have normalized, as have inflation expectations. Policymakers now expect inflation to remain close to target over the projection horizon, with the upward and downward pressures roughly balancing out. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/boc-policy-monitor.pdf

10/23/2024

The Bank of Canada today reduced its target for the overnight rate to 3%, with the Bank Rate at 4% and the deposit rate at 3%. The Bank is continuing its policy of balance sheet normalization. The Bank continues to expect the global economy to expand at a rate of about 3% over the next two years. Growth in the United States is now expected to be stronger than previously forecast while the outlook for China remains subdued. Growth in the euro area has been soft but should recover modestly next year. Inflation in advanced economies has declined in recent months, and is now around central bank targets. Global financial conditions have eased since July, in part because of market expectations of lower policy interest rates. Global oil prices are about $10 lower than assumed in the July Monetary Policy Report (MPR). In Canada, the economy grew at around 2% in the first half of the year and we expect growth of 1% in the second half. Consumption has continued to grow but is declining on a per person basis. Exports have been boosted by the opening of the Trans Mountain Expansion pipeline. The labour market remains softthe unemployment rate was at 6.5% in September. Population growth has continued to expand the labour force while hiring has been modest. This has particularly affected young people and newcomers to Canada. Wage growth remains elevated relative to productivity growth. Overall, the economy continues to be in excess supply. GDP growth is forecast to strengthen gradually over the projection horizon, supported by lower interest rates. This forecast largely reflects the net effect of a gradual pick up in consumer spending per person and slower population growth. Residential investment growth is also projected to rise as strong demand for housing lifts sales and spending on renovations. Business investment is expected to strengthen as demand picks up, and exports should remain strong, supported by robust demand from the United States. Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.3% in 2026. As the economy strengthens, excess supply is gradually absorbed. https://www.bankofcanada.ca/2024/10/fad-press-release-2024-10-23/

10/18/2024

Home sales edged up 1.9% between August and September, a third increase in four months. On the supply side, new listings jumped 4.9% from August to September, the eighth advance in nine months and the largest increase since July 2023. As a result, they are now at their highest level since February 2022. Active listings edged down 0.5% in September from their highest level since March 2020, the second decrease in three months. Meanwhile, the number of months of inventory (active listings-to-sales) decreased from 4.2 to 4.1 during the month, a level roughly back in line with its pre-pandemic level. Market conditions tightened marginally in September and remained tighter than their historical average in most provinces. They were roughly balanced in B.C. and softer than average in Ontario. Housing starts increased 10.8K in September to 223.8K (seasonally adjusted and annualized), a result below the median economist forecast calling for a 235.0K print. The monthly increase was solely driven by a rise in urban starts (+11K to 210.0K), which were mainly supported by the multi-family segment (+8.6K to 163.4K) while the single-family segment was up marginally (+2.4K to 46.6K). Starts were up in Calgary (+4.4K to 24.3K) and Vancouver (+3.0K to 23.4K) but declined in Toronto (-4.2K to 20.5K) and Montral (-2.1K to 13.0K). At the provincial level, the increases in total starts were registered in British Columbia (+9.3K to 44.0K), Ontario (+4.1K to 64.6K) and Saskatchewan (+2.6K to 6.1K), while the most notable declines were seen in Alberta (-1.5K to 46.8K), and Qubec (-1.1K to 40.3K). The TeranetNational Bank Composite National House Price Index rose by 0.5% from August to September after adjustment for seasonal effects. Eight of the 11 markets in the composite index were up during the month: Montreal (+2.4%), Winnipeg (+1.8%), Victoria (+1.2%), Edmonton (+1.1%), Ottawa-Gatineau (+0.9%), Halifax (+0.8%), Calgary (+0.5%) and Toronto (+0.3%). Conversely, declines occurred in Quebec City (-0.9%), Hamilton (-0.6%) and Vancouver (-0.2%). https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-market.pdf

10/16/2024

Following the Bank of Canadas third interest rate cut of the year, national home sales increased slightly in September compared to August. This follows a similar pattern of gains recorded in the months following the first two rate cuts. Home sales recorded over Canadian MLS Systems climbed 1.9% on a month-over-month basis in September 2024, reaching their highest level since July 2023. The national increase was led by the Greater Toronto Area and Hamilton-Burlington, Montreal and Quebec City, as well as Greater Vancouver and Victoria. Sales gains are now three for three in the months following interest rate cuts, which is a trend even though the increases werent headline-grabbing, said Shaun Cathcart, CREAs Senior Economist. That said, with the pace of rate cuts now expected to be much faster than previously thought, its possible some buyers may choose to hold off on a purchase for now. This could further boost the rebound expected in 2025 at the expense of the last few months of this year. Highlights: National home sales rose 1.9% month-over-month in September. Actual (not seasonally adjusted) monthly activity came in 6.9% above September 2023. The number of newly listed properties jumped 4.9% month-over-month. The MLS Home Price Index (HPI) inched up 0.1 % month-over-month but was still down 3.3% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price was up 2.1% on a year-over-year basis in September. https://stats.crea.ca/en-CA/

10/11/2024

Total housing starts in the 6 largest census metropolitan areas (CMAs) rose by 4% in the first half of 2024 compared to the same period in 2023. The level of new construction (68,639 units) was the second strongest since 1990. However, when adjusted for population size, combined housing starts were close to the historical average and werent enough to meet growing demographic demand. Calgary and Edmonton led the growth in housing starts due to record interprovincial migration in recent years, driven by their lower cost for housing and favourable economic conditions. In contrast, housing starts decreased in Toronto, Vancouver and Ottawa. Apartment starts in the 6 CMAs increased slightly, driven by rental construction. Nearly half of the apartments started in the first half of 2024 were purpose-built rentals the highest share on record. This trend aligns with demographic changes and declining homeownership affordability. Except for Calgary and Edmonton, condominium apartment starts fell in the first 6 months of 2024 a trend we expect will continue as developers struggle to reach the minimum pre-construction sales needed to start construction. Both investors and end users have significantly reduced their purchases of new condominiums because of the impact of higher interest rates. Developers prioritized clearing backlogs of projects under construction. As a result, apartment completions increased across the 6 CMAs, setting new records in each one except Montral and Vancouver. Municipalities and provinces are working actively to increase housing supply and variety, with policies aimed at better meeting the needs of a broad range of buyers and renters. https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/housing-market/housing-supply-report

10/9/2024

From Scotiabank As the reduction in inflation takes hold and economic activity slows down, the Bank of Canada seems to be shifting its priority from inflation control to worries about growth. Using a monetary policy reaction function that estimates the weight on inflation and the output gap over time, we find empirically that that Bank of Canada is now putting more weight on the output gap. This is a break from the last two years in which the estimated weight on inflation dominated that placed on the output gap. Our model suggests that as of 2024Q4, the BoC will focus more on eliminating this economic slack than on fighting inflation. Our current forecast is that the Bank of Canada cuts by 25 bps at each of the two remaining meetings this year. This work suggests there is a risk that Governor Macklem will be more aggressive than that if he indeed is putting more weight on growth going forward. That would translate into a risk of a 50 bps cut at one of these meetings. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.inflation-reports.boc-rate--october-2--2024.html

10/4/2024

Report by TD Economics The Canadian 5-year bond yield has declined over 100 bps since early May, while the Bank of Canada has cut its policy rate 3 times (with two more likely on tap this year). In short, the interest rate environment has significantly improved. Housing market activity is stirring, yet Canadian sales gains have, thus far, trailed what could typically be expected given this rush of rate relief. We chalk up the surprisingly subdued performance to two factors. The first is the continued strained affordability backdrop. Despite their recent decline, rates remain at levels last seen about 15 years ago. And, the second factor relates to the transparent messaging from central bankers that interest rates are set to fall even further. This is keeping potential buyers temporarily sidelined as they wait for additional cuts. The flat trend in Canadian average home prices since the summer means they havent really been penalized for that choice. This relative stillness will likely only last so long. Indeed, conditions are in place for a solid pickup in resale activity. Alongside a further steady decline in the BoCs overnight rate, economic growth is likely to regain some traction going forward, and the federal government will roll out meaningful changes to mortgage rules that will support homebuying at the end of the year. Now, first-time homebuyers (and those that purchase new builds) can access 30-year amortizations (instead of 25), thereby lowering their monthly mortgage obligation. Also, the cap on which a buyer can qualify for an insured mortgage has been raised from $1 million to $1.5 million. This means that, for example, a purchaser who buys a detached home in Toronto valued at $1.2 million (the median price in August) could put down about $95k as a downpayment, instead of needing $240k as before. The federal measures should help unlock powerful gains in Canadian sales and average home prices across Canada in the first half of 2025. However, part of this story will be that some activity that wouldve taken place this year is pushed into 2025, as buyers wait for the new rules to commence before purchasing. https://economics.td.com/ca-provincial-housing-outlook

10/2/2024

From the Bank of Canada In June, we began lowering our policy interest rate. We cut the policy rate at our last three decisions, for a cumulative decline of 75 basis points to 4.25%. Our most recent decision on September 4th reflected two main considerations. First, we noted that headline and core inflation had continued to ease as expected. Second, we said that as inflation gets closer to target, we want to see economic growth pick up to absorb the slack in the economy. Since then, weve been pleased to see inflation come all the way back to the 2% target. It has been a long journey. Now we want to keep inflation close to the centre of the 1%3% inflation-control band. We need to stick the landing. What does this mean for interest rates? With the continued progress weve seen on inflation, it is reasonable to expect further cuts in our policy rate. The timing and pace will be determined by incoming data and our assessment of what those data mean for future inflation. As always, we try to be as clear as we can about what we are watching as we chart the course for monetary policy. Economic growth picked up in the first half of this year, and we want to see it strengthen further so that inflation stays close to the 2% target. Some recent indicators suggest growth may not be as strong as we expected. We will be closely watching consumer spending, as well as business hiring and investment. We will also be looking for continued easing in core inflation, which is still a little above 2%. Shelter cost inflation remains elevated but has started to come down, and we are looking for it to moderate further. Our next decision is October 23rd. And we will have a revised economic outlook at that time. https://www.bankofcanada.ca/2024/09/economic-growth-during-uncertain-times/

9/27/2024

Report by TD Economics Were most of the way through 2024, and the data seems to be adhering to our long-held view that the Atlantic Region and Prairies would outperform, in terms of GDP growth, this year. We continue to expect Ontario, Quebec, and B.C. to trail the pack. However, the former two provinces have benefitted from growth upgrades for 2024, leaving B.C. as the laggard. Consumption has held up well across Canada so far this year, supported by resilience in Ontario and Quebec and relative strength in the Atlantic. Going forward, a downgraded profile for borrowing costs will offer more of a boost to household spending across Canada than wed previously thought. However, a chunk of highly indebted households in regions like Ontario and B.C. will have to contend with mortgage renewals at (likely much) higher rates. Housing markets are also poised to receive a lift from lower-than-expected interest rates. Indeed, weve notably upgraded our 2024 and 2025 home price forecasts across nearly all provinces except Ontario, where strained affordability and problems in the condo sector will likely weigh. Lower rates are a benefit to homebuilding as well, although we still see Canadian housing starts cooling through 2025 given low home sales levels in the past few years. At last count (Q2-2024), Canadian population growth continued to surge. Specifically, Canadas Big 4 provinces have yet to see any meaningful impact from recently announced federal policies to reduce the pool of non-permanent residents. We expect the effect of these policies to be significant and become evident beginning in Q4-2024, providing an impetus for a meaningful slowdown in population growth across the nation. Population-fueled labour force gains have outpaced employment for most of this year, driving the national unemployment rate to its highest point since mid-2021. Notably, Ontario, Alberta and Quebec have seen the most material increases in their unemployment rates. With population gains expected to cool, the jobless rate is projected to peak at the turn of the year before gently pulling back in 2025. https://economics.td.com/provincial-economic-forecast

9/24/2024

Summary Home sales edged up 1.3% between July and August, following a 0.6% decrease the previous month. On the supply side, new listings edged up 1.1% from July to August, the seventh advance in eight months. They are now at their highest level since June 2022. Active listings edged down 1.1% in August from their highest level since March 2020, the second decrease in six months. Meanwhile, the number of months of inventory (active listings-to-sales) edged down from 4.2 to 4.1 during the month, a level roughly back in line with its pre-pandemic level. Market conditions tightened marginally in August and remained tighter than their historical average in most provinces. They were balanced in Manitoba and softer than average in B.C. and Ontario. After a surge in July, housing starts dropped 62.4K in August to 217.4K (seasonally adjusted and annualized), a result well below the median economist forecast calling for a 250.0K print and its lowest level since November 2023. Urban starts decreased by 61.6K (to 199.5K) on an important drop in the multi-family segment (-62.8K to 154.3K) while the single-family segment was up marginally (+1.2K to 45.2K). Starts were down by more than half in Toronto (-40.4K to 24.6K) and decreased more modestly in Vancouver (-9.6K to 20.5K) and Calgary (-9.2K to 19.9K). On the other hand, they increased by 6.0K in Montreal (to 15.2K) after reaching their lowest level since February 2015 (excluding April 2020) the previous month. The TeranetNational Bank Composite National House Price Index rose by 0.6% from July to August after adjustment for seasonal effects. Six of the 11 markets in the composite index were up over the month: Quebec City (+3.9%), Halifax (+3.2%), Ottawa-Gatineau (+1.9%), Vancouver (+1.7%), Montreal (+1.0%) and Toronto (+0.2%). Conversely, declines occurred in Hamilton (-0.1%), Winnipeg (-0.7%), Calgary (-1.1%) and Edmonton (-2.6%), while prices remained stable in Victoria during the month. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-market.pdf

9/20/2024

National home sales increased in June following the Bank of Canadas first interest rate cut since 2020, and activity posted another small gain in August on the heels of the second rate cut in late July, but the bigger picture appears to be a market mostly stuck in a holding pattern. Home sales recorded over Canadian MLS Systems edged up by 1.3% on a month-over-month basis in August 2024, reaching their highest level since January and their second highest in over a year. Despite some fledgling signs of life to kick off the long-awaited monetary policy easing cycle, Canadian housing market activity still looks to be stuck in the same holding pattern its been in all year, said Shaun Cathcart, CREAs Senior Economist. That said, with ever more friendly interest rates now all but guaranteed later this year and into 2025, it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country. Highlights: National home sales edged up 1.3% month-over-month in August. Actual (not seasonally adjusted) monthly activity came in 2.1% below August 2023. The number of newly listed properties ticked up 1.1% month-over-month. The MLS Home Price Index (HPI) was unchanged month-over-month but was down 3.9% year-over-year. The actual (not seasonally adjusted) national average sale price was almost unchanged (+0.1%) on a year-over-year basis in August. https://stats.crea.ca/en-CA/

9/18/2024

Canadians work hard to be able to afford a home. However, the high cost of mortgage payments is a barrier to homeownership, especially for Millennials and Gen Z. To help more Canadians, particularly younger generations, buy a first home, new mortgage rules came into effect on August 1, 2024, allowing 30 year insured mortgage amortizations for first-time homebuyers purchasing new builds. The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announced a suite of reforms to mortgage rules to make mortgages more affordable for Canadians and put homeownership within reach: Increasing the $1 million price cap for insured mortgages to $1.5 million, effective December 15, 2024, to reflect current housing market realities and help more Canadians qualify for a mortgage with a downpayment below 20 per cent. Increasing the insured-mortgage capwhich has not been adjusted since 2012to $1.5 million will help more Canadians buy a home. Expanding eligibility for 30 year mortgage amortizations to all first-time homebuyers and to all buyers of new builds, effective December 15, 2024, to reduce the cost of monthly mortgage payments and help more Canadians buy a home. By helping Canadians buy new builds, including condos, the government is announcing yet another measure to incentivize more new housing construction and tackle the housing shortage. This builds on the Budget 2024 commitment, which came into effect on August 1, 2024, permitting 30 year mortgage amortizations for first-time homebuyers purchasing new builds, including condos. These new measures build on the strengthened Canadian Mortgage Charte, announced in Budget 2024, which allows all insured mortgage holders to switch lenders at renewal without being subject to another mortgage stress test. Not having to requalify when renewing with a different lender increases mortgage competition and enables more Canadians, with insured mortgages, to switch to the best, cheapest deal. https://www.canada.ca/en/department-finance/news/2024/09/government-announces-boldest-mortgage-reforms-in-decades-to-unlock-homeownership-for-more-canadians.html

9/13/2024

From Scotiabank The Bank of Canada and Federal Reserve should cut policy rates at each meeting for the remainder of the year and well into 2025. Growth is slowing as the impact of past tightening is felt but we expect a gradual strengthening of economic activity as policy rates come down. North American central bankers seem, at this point, to have achieved a soft landing. We remain concerned about potential upside risks to household spending given high savings rates and accumulated savings, solid income growth, the massive gap between supply and demand in the housing market, and historically strong population growth. We assume a gradual improvement in spending but a larger or more rapid rebound in spending could imperil Bank of Canada cuts in mid-2025. The usual disclaimer applies: US election outcomes could lead to significant changes to this outlook. The path forward for interest rates keeps getting clearer. With inflation and growth cooling owing in part to the lagged impacts of monetary policy, central bankers in Canada and the US seem confident in their assessment that interest rates will be cut substantially in coming months. The key questioning surrounding policy rates is the speed at which rates will decline, not whether they will decline from here. Key to that assessment is a view on growth dynamics, inflation, and risks to both. Though growth is weakening in both countries, we believe economies are landing softly and will not require central banks to act in an urgent way to shore up growth. As a result, we expect a gradual pace of cuts in Canada and the US, with two more cuts in Canada this year and three cuts in the US. A multitude of risks exist and while markets and most economists appear to prioritize downside risks to the outlook and interest rates, we continue to believe there are meaningful upside risks to both. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.global-outlook-and-forecast-tables.scotiabank%27s-forecast-tables.2024.september-10--2024.html

9/11/2024

From National Bank of Canada Summary Some forecasters, including the Bank of Canada, had high hopes of an economic recovery and a stabilization of the unemployment rate in the second half of the year, in the wake of interest rate cuts. For several months now, we have been arguing that, although interest rates are starting to come down, monetary policy is far too restrictive for this recovery and stabilization to occur, and recent economic data bears this out. With the Canadian economy stagnating in June and July, the 2.8% growth expected in Q3 by the Bank of Canada is now virtually unattainable. As a result, GDP per capita continues its downward trend that began in 2022, illustrating the fact that the economy continues to grow below potential and that excess supply continues to increase. Not only do companies seem to have an excess of inventories, they also seem to have an excess of workers. For now, this is limited to a hiring freeze at the macro level, as evidenced by average job gains of just 6K per month over the past three months. Those trying to enter the job market - young people and newcomers - are the main victims of Canadas weak hiring climate. With widespread inflation a thing of the past in Canada, we believe the door is wide open for the Bank of Canada to return its policy rate to neutral (between 2.5% and 3.0%) as soon as possible. In the meantime, the damage to the labour market could be greater than necessary. We anticipate economic growth of just 0.9% in 2024 and 1.3% in 2025, which would translate into an unemployment rate of around 7.4% by mid-2025. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/mensuel/monthly-economic-monitor-canada.pdf

9/6/2024

From National Bank of Canada For the third time in as many meetings, the Bank of Canada lowered the target for the overnight rate by 25 basis points, a decision in line with the consensus and market expectations. The rate reduction brings the policy rate to 4.25%, the lowest since January 2023. The move also pushes the BoCs policy rate 125 bps below the Federal Reserves (based on their upper bound target), the most since 2000 (although that gap will narrow in September). Meanwhile, balance sheet normalization will continue as expected. Here are additional highlights from the communique and the opening statement to the press conference: Driving the decision to cut was continued easing in broad inflationary pressures and excess supply in the economy [putting] downward pressure on inflation. Once again, forward rate guidance in the press release was vague but the opening statement to the presser reiterated that it is reasonable to expect further cuts if inflation eases in line with their forecast. The statement notes that Q2 growth was stronger than expected but preliminary indicators suggest that economic activity was soft through June and July. Macklem added they want to see economic growth pick up to absorb slack. The press release highlights that the labour market continues to slow, with little change in employment in recent months. However, wage growth remains elevated relative to productivity. In the opening statement to the presser, Macklem added they still expect slack in the labour market to slow wage growth. As for inflation there has been continued easing in broad inflationary pressures, with inflation breadth back to historical norms. Although shelter is holding inflation up, it is starting to slow. Reflecting base effects, Macklem added that inflation may bump up later in the year. However, they need to need to increasingly guard against the risk that the economy is too weak, and inflation falls too much.. Bottom Line: With a 25 basis point rate cut all but assured, the focus of todays decision was always going to be on the Banks guidance/stance. Overall, there was very little changed relative to July as Macklem reiterated it is still reasonable to expect further rate cuts (as long as inflation cooperates). At the margin, there appears to be a bit more confidence on the inflation outlook as shelter prices are seen as starting to slow. And as we got a sense of in July, they increasingly want to guard against too much slack and inflation undershooting over the projection horizon. They therefore need growth to pick up. What does it mean for the meetings ahead? To us, the BoCs base case outlook is for continued 25 basis points cuts at each of the remaining meetings in 2024 (and likely well into 2025 too). However, there is a growing focus on downside inflation/economic risks which should keep markets pricing some probability of a larger-than-25 basis point cut. Thats appropriate in our view given the balance of risks in the labour market and on the growth outlook. The intermeeting period will offer a wealth of information to inform the near-term rate path as were due to receive two employment reports (including one on Friday), two CPI reports, a read on July GDP and a Business Outlook Survey. Undoubtedly, it will be jobs and inflation data that will be most influential. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/boc-policy-monitor.pdf

9/4/2024

The Bank of Canada today reduced its target for the overnight rate to 4%, with the Bank Rate at 4% and the deposit rate at 4%. The Bank is continuing its policy of balance sheet normalization. The global economy expanded by about 2% in the second quarter, consistent with projections in the Banks July Monetary Policy Report (MPR). In the United States, economic growth was stronger than expected, led by consumption, but the labour market has slowed. Euro-area growth has been boosted by tourism and other services, while manufacturing has been soft. Inflation in both regions continues to moderate. In China, weak domestic demand weighed on economic growth. Global financial conditions have eased further since July, with declines in bond yields. The Canadian dollar has appreciated modestly, largely reflecting a lower US dollar. Oil prices are lower than assumed in the July MPR. In Canada, the economy grew by 2.1% in the second quarter, led by government spending and business investment. This was slightly stronger than forecast in July, but preliminary indicators suggest that economic activity was soft through June and July. The labour market continues to slow, with little change in employment in recent months. Wage growth, however, remains elevated relative to productivity. As expected, inflation slowed further to 2.5% in July. The Banks preferred measures of core inflation averaged around 2 % and the share of components of the consumer price index growing above 3% is roughly at its historical norm. High shelter price inflation is still the biggest contributor to total inflation but is starting to slow. Inflation also remains elevated in some other services. https://www.bankofcanada.ca/2024/09/fad-press-release-2024-09-04/

8/30/2024

Report by TD Economics Highlights The Fed is finally ready to cut interest rates, but questions remain on the speed and magnitude. We penciled in 25 basis points per meeting, with over 250 bps in cuts over this year and next. However, now that the Fed is confident that inflation will return to target, it will prioritize a little more of the other side of its dual mandate developments in the job market to ultimately determine the speed and size of rate cuts. The BoC has moved earlier, established a pace of 25 basis points per meeting, and already gapped 100 basis points to its U.S. counterpart. The economic bar will be higher to deliver on larger cuts than the current pace. The Federal Reserve is just under three weeks away from delivering its first interest rate cut in four years. While at times it felt like the day would never come, inflation has finally stabilized close to the 2% target alongside a noticeable cooling in the labor market. The Feds focus has now pivoted away from just fighting inflation, to striking the right balance on its dual mandate to ensure the economic landing remains a soft one. This is the stage where markets typically get nervous on whether the Fed has got the timing right, evidenced by recent bouts of financial volatility. The emphasis will be on downside misses in the data given that the Feds policy rate is sitting at a lofty level of 5.50%. And with that, we can expect to see pricing jump around between a Fed that needs to act urgently to one that can move in a measured way. But in all circumstances, one prediction will hold firm: the Fed will cut interest rates in September, kicking off a prolonged cycle. This is not a one-and-done deal. https://economics.td.com/ca-dollar-and-sense

8/28/2024

Home sales edged down 0.7% between June and July, a decline that follows a 3.4% pick up in the previous month which was due to the beginning of easing monetary policy by the Bank of Canada. On the supply side, new listings edged up 0.9% from June to July, the sixth advance in seven months. Active listings edged down 0.7% in July from their highest level since March 2020, the first decrease in five months. Meanwhile, the number of months of inventory (active listings-to-sales) remained stable at 4.2 during the month, a level back in line with its pre-pandemic level. Market conditions were unchanged in July and remained tighter than their historical average in most provinces. They were balanced in Manitoba and B.C., and softer than average in Ontario. After a slowdown in June, housing starts increased 37.9K in July to 279.5K (seasonally adjusted and annualized), a result well above the median economist forecast calling for a 245.0K print and its highest level since June 2023. Urban starts increased by 38.8K (to 261.1K) on an important gain in the multi-family segment (+38.1K to 217.3K) while the single-family segment was up marginally (+0.7K to 43.8). Starts practically doubled in Toronto (+30.7K to 65.1K), and also grew in Vancouver (+9.6K to 30.1K) and Calgary (+6.6K to 29.1K). On the other hand, they dropped significantly in Montreal (-26.0K to 9.0K) to their lowest level since February 2015 (excluding April 2020). The TeranetNational Bank Composite National House Price Index remained virtually stable from June to July, with a marginal increase of 0.2% after adjustment for seasonal effects. Six of the 11 markets in the composite index were up over the month: Hamilton (+2.3%), Victoria (+1.0%), Halifax (+0.8%), Calgary (+0.7%), Toronto (+0.3%) and Quebec City (+0.2%). Conversely, prices fell in Ottawa-Gatineau (-0.4%), Winnipeg (-0.1%), Vancouver (-0.1%) and Montreal (-0.1%), while they remained stable in Edmonton. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-market.pdf

8/23/2024

National housing resale conditions softened from June to July as reflected by the modest decline in the sales-to-new listings ratio. Over this period, national sales declined by 0.7% (sa m/m) while new listings increased 0.9%. In July, sales were higher by 4.8% (nsa) compared to the same month in 2023. After increasing from May to June, the sales-to-new listings ratiowhich reflects how tight resale conditions areedged down to 52.7% from June to July, essentially back to its May level, and still within the range for balanced national resale market conditions (of between 45% to 65%). Months of inventory remained unchanged over this period at 4.2, still below its long-term (pre-pandemic) average of 5.3. And since the national market aggregates very different regional markets, there are wide variations in terms of how this indicator compares to its long-term average across provinces, ranging from less than 2 weeks above average in Ontario and British Colombia and Ontario to 5.7 months below in New Brunswick. About 2/3 of the markets witnessed a decline in their sales-to-new listings ratio from June to July. Consequently, the number of sellers favouring markets declined from 10 in June to 5 in July while the number of balanced markets increased from 16 to 22. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-news-flash.august-15--2024.html

8/21/2024

From National Bank of Canada Q2 2024 marked a second, albeit smaller, improvement in affordability. The amelioration was relatively widespread with 8 of the ten markets covered experiencing a decline in mortgage payment as a percentage of income (MPPI). The most significant improvement occurred in Hamilton, where a home price decline compounded on the broader trend of lower interest rates and rising incomes. On the flip side, Edmonton and Calgary saw rising home prices largely offset any relief. Overall, the composite improved with slightly higher prices not enough to offset the decline in mortgage interest rates and higher incomes. Still, the housing market remains unaffordable with the latest progress bringing the MPPI to 57.9%. Looking ahead, falling mortgage interest rates will likely be the main driver for improvements in affordability. So far, the decline in mortgage interest rates was precipitated by both expectations of rate cuts and the materialization of easing by the Bank of Canada. Given the deterioration in the growth outlook and the weakening in inflation and the labour market, we expect further central bank easing of 150bps over the next 12 months. Although the policy rate and mortgage interest rates do not always follow in lockstep, this development would provide a significant alleviation of the financing burden. At current income and home price levels, it would bring affordability halfway back to pre-pandemic levels. There is the risk, however, that lower interest rates could lift home prices, especially considering the current population boom. That said, between the payment shock from upcoming renewals and the rising unemployment rate, we do not expect much vigour in home prices for the next 12 months. HIGHLIGHTS: Canadian housing affordability posted a second consecutive improvement in Q224. The mortgage payment on a representative home as a percentage of income (MPPI) fell 1.1 percentage points. Seasonally adjusted home prices increased 0.4% in Q224 from Q124; the benchmark mortgage rate (5-year term) declined 11 basis points, while median household income rose 1.2%. Affordability improved in 8 of the ten markets covered in Q2. On a sliding scale of markets from best progression to least: Hamilton, Toronto, Victoria, Ottawa-Gatineau, Vancouver, Quebec, Montreal, Winnipeg. On the flip side, Edmonton and Calgary deteriorated. Countrywide, affordability enhanced 1.1 pp in the condo portion and in the non-condo segment. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/housing-affordability.pdf

8/16/2024

While there were early signs of renewed momentum in June following the Bank of Canadas first interest rate cut since 2020, activity in Canadas housing market took a pause in July. Home sales activity recorded over Canadian MLS Systems edged back by 0.7% on a month-over-month basis in July 2024, giving back a small portion of Junes post-first rate cut gain. With another rate cut announced on July 24, weve now seen two rate cuts in a row, and the expected pace of future policy easing has steepened considerably, with markets now anticipating rate cuts at every remaining Bank of Canada decision this year, said Shaun Cathcart, CREAs Senior Economist. Combine that with a record amount of demand waiting in the wings, and the forecast for a rekindling of Canadian housing activity going into 2025 has just gone from a layup to a slam dunk. Highlights: National home sales edged back 0.7% month-over-month in July. Actual (not seasonally adjusted) monthly activity came in 4.8% above July 2023. The number of newly listed properties ticked up 0.9% month-over-month. The MLS Home Price Index (HPI) edged up 0.2% month-over-month but was down 3.9% year-over-year. The actual (not seasonally adjusted) national average sale price was almost unchanged (-0.2%) on a year-over-year basis in July. https://stats.crea.ca/en-CA/

8/14/2024

Non-mortgage loans are above the levels seen before the pandemic Non-mortgage loans have increased from the first quarter of 2019 and edged up in the first quarter of 2020. Over the next two quarters, non-mortgage debt levels declined as lockdowns came into full effect. Canadians were able to build up savings, reduce debt and reduce spending to bolster their finances against uncertainty as non-essential businesses closed and travel restrictions were imposed. Despite this reduction, since 2022, debt levels have risen, ultimately wiping out the previous effects. This increase in debt levels can be attributed to several factors, including inflation that peaked at 8.1% year over year in June 2022, making everyday goods and services more costly. Uninsured mortgage loans grow faster than insured ones as house prices increase Since 2017, uninsured mortgages have predominated in Canada, overtaking insured ones for the first time that year. From 2012 to 2019, the outstanding value of uninsured mortgages grew quarterly by 3.0% on average, while insured mortgages declined by 0.4%. This disparity widened during the pandemic as house prices soared due to lower borrowing costs and increased demand, with the quarterly growth of outstanding value of uninsured mortgages reaching 3.4% from 2020 to 2022, while insured mortgages declined by 0.5%. Rising interest rates from early 2022 through the third quarter of 2023 cooled housing market activity, decelerating the quarterly growth of uninsured mortgages to 2.0%, compared with a decline of 1.0% for insured mortgages during the same period. Arrears for non-mortgage loans are trending upward Households with loans in arrears, defined as those late on debt payments by 90 days or more, saw a slight increase during the first two quarters of 2020 owing to economic closures. Government support during the pandemic helped reduce arrears by increasing household disposable income. However, as interest rates rose and pandemic-related support diminished, non-mortgage loan arrears climbed again in 2022. Passenger vehicle loans (+0.18%) and credit card loans (+0.07%) saw the largest arrears increases by the third quarter of 2023 compared with the first quarter of 2019. Mortgage loan arrears have not seen a similar rise despite increasing interest rates. By the third quarter of 2023, mortgage arrears were still below pre-pandemic levels, down 0.08% from the first quarter of 2019. Most households have yet to feel the full impact of higher interest rates, as many mortgage renewals are due in the coming years. According to the Canada Mortgage and Housing Corporation, around 2.2 million mortgages, or 45% of all outstanding mortgages in Canada (over $675 billion), will face an interest rate shock in 2024 and 2025. https://www150.statcan.gc.ca/n1/daily-quotidien/240814/dq240814d-eng.htm

8/9/2024

This study uses several demographic scenarios to illustrate how Canadas labour force could evolve from 2023 to 2041. This projection exercise produced a number of findings. Despite the baby boomer cohorts retiring, the size of Canadas labour force is likely to increase over the next few years because of migratory increase. The scenarios show that the size of the labour force is sensitive to both immigration levels and above all, the participation rate of the Canadian population. If labour force participation in Canada in 2041 reached the same intensity as in Japan, the size of the Canadian labour force would increase in a similar way to the scenario in which 750,000 permanent immigrants are admitted annually. The increase in the overall participation rate would be five times higher in the scenario where participation rates in Canada converge toward those currently observed in Japan, compared with the increase observed in the scenario in which Canada admits 750,000 immigrants annually. The scenario in which participation rates converge toward those observed in Japan, while unlikely given the significant differences between the two societies, nevertheless illustrates the potential impact of an increase in Canadians participation rate on the growth and demographic weight of the labour force. Canadas strong population growth, driven by large-scale immigration, brings both opportunities and challenges. While it increases the size of the labour force, it has a limited impact on the overall labour force participation rate and on the aging and renewal of the labour force. Beyond its purely demographic impact, immigration also exerts pressure on housing supply, infrastructure construction and the provision of services to the population, while also addressing unfilled job demands in certain employment sectors. The results of this population projection exercise show that immigration is not the only lever for influencing the evolution of the Canadian labour force. According to the projections, various processes will stabilize at the start of the 2030s, when the last baby boomers turn 65. Furthermore, the projections show that immigration levels would not significantly influence the aging or rejuvenation of the future labour force if they remained relatively constant over time. https://www150.statcan.gc.ca/n1/pub/75-006-x/2024001/article/00005-eng.htm

8/7/2024

The role of short-term rentals (STRs) in Canadas housing challenges remains a subject of ongoing policy debate in many Canadian cities. While there is a widespread notion that such rentals limit the availability of long-term housing, empirical analysis of their impacts has produced mixed results. This paper provides an overview of STR activity across Canada. The paper focuses on the subset of STRs that could potentially serve as long-term housing. This subset of STRs, referred to as potential long-term dwellings (PLTDs), is intended to capture STR units that are not serving as anyones primary residence, but could potentially function as long-term housing (either as owner-occupied or rental units). The PLTD subset comprises entire units listed for more than 180 days a year, excluding vacation-type properties. Previous research indicates that STR activity plays an increasingly significant role in the Canadian accommodation services subsector, with its share of revenues rising from an estimated 7.0% in 2017 to 15.2% in 2021. However, in the housing market, STRs still account for a small proportion of total housing units. In 2023, the estimated number of PLTDs in Canada was 107,266, a figure that represents less than 1% of total housing units in Canada. PLTDs also accounted for a small share of total housing units in Canadas largest census metropolitan areas (CMAs). However, the share of PLTDs was higher in tourist areas, particularly around ski hills. In Whistler, they constituted 35.0% of all housing units, while in Mont-Tremblant, their share was 16.4%. https://www150.statcan.gc.ca/n1/pub/11-621-m/11-621-m2024010-eng.htm

8/2/2024

For the second time in as many meetings, the Bank of Canada lowered the target for the overnight rate by 25 basis points, a decision in line with the consensus and market expectations. The rate reduction brings the policy rate to 4.50%, fully unwinding the two rate hikes delivered in June and July 2023. This move also pushes the BoCs policy rate 100 bps below the Federal Reserves (based on the upper bound target), marking the largest negative gap since the late 1990s. Despite the consecutive cuts and upward pressure on CORRA, balance sheet normalization will continue (as expected). Here are additional highlights from the communique and the opening statement to the press conference: Driving the decision to cut was broad price pressures continuing to ease and ongoing excess supply lowering inflationary pressures. Once again, there wasnt really any forward rate guidance in the press release but the opening statement to the presser reiterated that it is reasonable to expect further cuts if inflation eases in line with their forecast. He added that downside risks are taking on increased weight in our monetary policy deliberations. Note that the statement dropped the focus items that theyd previously been referring to (i.e., the balance between demand and supply, inflation expectations, wage growth, and corporate pricing behaviour). Instead, incoming information will guide future decisions. The statement notes that excess supply is growing: With robust population growth of about 3%, the economys potential output is still growing faster than GDP, which means excess supply has increased. On the labour market, they highlight that there are signs of slack with labour force growth outpacing employment and job seekers having more trouble finding work. Wage growth is showing some signs of moderating but remains elevated. As for inflation, the statement notes that broad inflationary pressures are easing although shelter and some services inflation remains elevated. Governing Council is carefully assessing these opposing forces on inflation. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/boc-policy-monitor.pdf

7/31/2024

Artificial Intelligence (AI) has had many breakthroughs in the past few years, and more and more households are beginning to incorporate it in their daily routines. The BMO Real Financial Progress Index reveals a growing number of Canadians, notably Gen Z, are using artificial intelligence (AI) to help manage their finances and investments. Among the 33% of Canadians using AI to help manage their finances, the most common uses include: Learning more about personal finance topics (45%), Creating and/or updating household budgets (43%), Identifying new investment strategies (42%), Building savings (40%), and Creating and/or updating their financial plans (40%). While AI is helping Canadians manage some aspects of finances, over two thirds (68%) say AI cannot understand how emotions influence financial planning. AI is a transformative technology that can instantly analyze information and generate ideas, but peoples relationship with money is complex, personal and emotional. By making it easier to help manage finances, AI is proving a powerful tool to build financial literacy and make informed financial decisions, and together with guidance from a professional advisor, more Canadians can be empowered to conveniently manage their money, achieve their goals and make real financial progress. https://about.bmo.com/artificial-intelligence-has-taken-the-world-by-storm-heres-how-canadians-are-using-it-to-help-with-their-finances/

7/26/2024

From Scotiabank Further rate cuts in Canada this year a certainty while we continue to believe that the Federal Reserve will cut in September. Economic data have come in largely as expected so our forecasts remain largely unchanged. Lower interest rates will provide a mild boost to economic growth later this year, but the full impact of rate cuts will take time to materialize given the lags of monetary policy. Clarity on interest rates and the outlook over the next few months may be fleeting. The results of the US election risk muddying the outlook substantially. The long-awaited rate cuts are finally underway in Canada and are likely to start in the United States in September. These will eventually provide relief to the interest rate sensitive parts of the economy and may also lift business and household sentiment. These rate cuts are occurring in the context of slow, but still-positive growth, and solid progress on inflation management even though there remain substantial risks of higher inflation (linked to the sharp rise in global shipping costs and rapid wage growth and low productivity in Canada). We remain comfortable with our view that policy rates will fall by another 75 basis points in Canada this year and that the Federal Reserve will cut its policy rate by at least 50 basis points starting in September. Moreover, economic data have come in roughly as expected over the last several months, leading to only minor tweaks to the outlook for growth. All told, this forecast update is largely similar to our previous forecast. In this sense, the stability in our forecast combined with more certainty on the interest rate path suggest greater clarity in the outlook for the next several months. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.global-outlook-and-forecast-tables.scotiabank%27s-forecast-tables.2024.july-18--2024.html

7/24/2024

The Bank of Canada today reduced its target for the overnight rate to 4%, with the Bank Rate at 4% and the deposit rate at 4%. The Bank is continuing its policy of balance sheet normalization. The global economy is expected to continue expanding at an annual rate of about 3% through 2026. While inflation is still above central bank targets in most advanced economies, it is forecast to ease gradually. In the United States, the anticipated economic slowdown is materializing, with consumption growth moderating. US inflation looks to have resumed its downward path. In the euro area, growth is picking up following a weak 2023. Chinas economy is growing modestly, with weak domestic demand partially offset by strong exports. Global financial conditions have eased, with lower bond yields, buoyant equity prices, and robust corporate debt issuance. The Canadian dollar has been relatively stable and oil prices are around the levels assumed in Aprils Monetary Policy Report (MPR). In Canada, economic growth likely picked up to about 1% through the first half of this year. However, with robust population growth of about 3%, the economys potential output is still growing faster than GDP, which means excess supply has increased. Household spending, including both consumer purchases and housing, has been weak. There are signs of slack in the labour market. The unemployment rate has risen to 6.4%, with employment continuing to grow more slowly than the labour force and job seekers taking longer to find work. Wage growth is showing some signs of moderating, but remains elevated. GDP growth is forecast to increase in the second half of 2024 and through 2025. This reflects stronger exports and a recovery in household spending and business investment as borrowing costs ease. Residential investment is expected to grow robustly. With new government limits on admissions of non-permanent residents, population growth should slow in 2025. https://www.bankofcanada.ca/2024/07/fad-press-release-2024-07-24/

7/19/2024

Summary Home sales edged up 3.7% between May and June, the first increase in five months following the beginning of the monetary easing cycle by the Bank of Canada in June. On the supply side, new listings increased 1.5% from May to June, the fifth advance in six months. Active listings rose by 1.2% in June, the third consecutive month of growth and the highest level since March 2020. Meanwhile, the number of months of inventory (active listings-to-sales) decreased from 4.3 in May to 4.2 in June, a level back in line with its pre-pandemic level. Market conditions tightened slightly during the month and remained tighter than their historical average in most provinces. They were balanced in Manitoba and B.C., and softer than average in Ontario. Housing starts decreased 23.5K in June to 241.7K (seasonally adjusted and annualized), a result below the median economist forecast calling for a 254.1K print. Urban starts decreased by 23.2K (to 223.2K) on a decline in the multi-family segment (+23.9K to 180.2K) while the single-family segment was up marginally (+0.7K to 43.0). Starts decreased in Vancouver (-3.0K to 20.6K), Toronto (-19.9K to 34.3K), and Calgary (-1.0K to 22.5K), while they increased in Montreal (+6.6K to 35.0K). At the provincial level, the most pronounced decreases in total starts were registered in Ontario (-19.1K to 67.6K), Alberta (-6.0K to 42.3K), and B.C. (-5.3K to 40.8K). Meanwhile, notable increases were seen in Manitoba (+6.3K to 10.3K), Nova Scotia (+3.2K to 12.1K), and Saskatchewan (+2.8K to 4.6K). The Teranet-National Bank Composite National House Price Index remained stable from May to June, after seasonal adjustments. Five of the 11 markets in the composite index were up during the month: Winnipeg (+3.9%), Edmonton (+2.3%), Quebec City (+1.1%), Calgary (+0.1%) and Toronto (+0.1%). Conversely, prices fell in Hamilton (-2.2%), Halifax (-0.8%), Ottawa-Gatineau (-0.8%), Vancouver (-0.3%) and Montreal (-0.3%), while they remained stable in Victoria. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-market.pdf

7/17/2024

Key Takeaways for 2024 Overall, the Canadian mortgage landscape in 2024 was relatively similar to 2023. The rate of mortgages contracted in the last 18 months were stable. Renewing vs buying. Consumers renewing their mortgage increased (62% vs 58% in 2023) whereas repeat buyers and first-time buyers decreased. Significantly more mortgage consumers were impacted this year by rising interest rates (65% vs 50% in 2023). However, most consumers had strategies in place to avoid defaulting on their mortgage. It took an average of 4.2 years for consumers to save for a down payment, with 30% of buyers receiving a gift to help with the cost. While consumers continue to have concerns or uncertainty during the home buying process, the majority (79%) still believe it is a good long-term financial investment. Nearly three times as many buyers this year said high interest rates made them delay buying a home (13% vs 5% in 2023). First-time homebuyers and newcomers were the most likely to postpone. The vast majority of consumers did research before their most recent mortgage transaction, with 52% of consumers researching exclusively online, compared to just 34% in 2023. Going green. Among homeowners who did energy efficient renovations, 93% are satisfied with the results of their renovations and 68% saw savings in their energy/electricity bills. https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/housing-research/surveys/mortgage-consumer-surveys/survey-results-2024/2024-cmhc-mortgage-consumer-survey-en.pdf

7/12/2024

From TD Economics As we had anticipated, its been a quiet spring selling season. Elevated borrowing costs and Bank of Canada uncertainty have kept buyers on the sidelines through May, leaving Canadian home sales at the lower end of their pre-Covid levels. Canadian average home prices have managed to grind higher so far this spring, but largely due to a shift to more expensive homes being sold. In contrast, benchmark prices (which are a more like for like measure) have declined. The resale market is still projected to gain traction in the second half of 2024, although weve dialed back the expected pace of gains in sales and prices relative to our March forecast. This is because borrowing costs are unlikely to fall as much as previously thought, with one fewer cut expected by the Bank of Canada this year. Whats more, the U.S. central bank is now likely to begin cutting its policy rate late in 2024, instead of the summer, which has spilled over to more limited declines in Canadian bond yields over the remainder of this year. 2025 growth forecasts for Canadian home sales and average home prices have been lifted, however, as downgraded activity in 2024 yields additional pent-up demand waiting to be unleashed, and more meaningful rate relief is delivered. Were retaining our view that price growth will outperform in the Prairies going forward, lifted by tight markets, historically strong population growth, solid affordability conditions, and economic outperformance. Elsewhere, relatively tight supply/demand balances should keep prices on the rise in Quebec and the Atlantic, although notable affordability deteriorations will prevent even stronger gains. Interprovincial migration has also begun to slow in the Atlantic, weighing on what is likely a key source of ownership demand in the region. In Ontario and B.C., average home price growth should benefit from the strongest sales gains in the country moving forward, with pent-up demand driving a recovery in activity from low levels in these two markets. In the near-term, price growth will be restrained by loose supply/demand conditions, although compositional forces could offer some offset in Ontario, as theyve done in recent months. Thereafter, historically challenging affordability backdrops should cap the pace of gains taking place in the two regions. https://economics.td.com/ca-provincial-housing-outlook

7/10/2024

Nearly half (48%) admit to spending more than they know they should. 15% believe impulse shopping is preventing them from making real financial progress. A special report from the BMO Real Financial Progress Index reveals Canadians plan to spend more on vacations and/or travel (20%), home renovations (15%), weddings for family and/or friends (10%) and special events such as graduations and showers (9%) this summer compared to 2023. Household spending continues to be a primary driver of economic growth. According to BMO Economics, consumer confidence will likely improve following the Bank of Canadas first rate cut in four years, with expectations for another two rate cuts for the rest of 2024 and several more in 2025. Inflation is showing continued signs of calming, opening the door for further rate cuts by the Bank of Canada, said Sal Guatieri, Senior Economist, BMO. Lower borrowing costs and slower-rising living costs should provide sufficient relief to support moderate two per cent growth in consumer spending this year and next. The BMO Real Financial Progress Index explores Canadians summer spending plans and forecasts: Sizzling Summer Travels: One-in-five Canadians (20%) plan to spend more on summer travel, while 38% plan on spending the same as in 2023. 15% plan on spending less than last year. Overcast Conditions for Celebrating Milestones: Nearly a tenth of Canadians plan to spend more on weddings (9%) and special events such as graduations and showers (9%) for family and friends. More than a fifth (22%) plan to spend the same on weddings for family and/or friends and more than a quarter intend to spend the same as last year on special events (27%). Ramping Up Home Renovations: 15% plan to spend more on home renovations, while nearly a quarter (24%) will spend the same as last year. 13% intend to spend less on home renovations in 2024. Summer Splurges: For those planning on making a large purchase, including buying a car, 18% plan to spend the same and 10% plan to spend more than they did in 2023. Climbing Summer Camp Costs: 15% of parents with children under the age of 18 plan to spend more on summer camps and/or childcare and 36% intend to spend the same as last year. https://newsroom.bmo.com/2024-06-18-BMO-Survey-Canadian-Summer-Spending-Heats-Up

3/14/2023

For the first time in 9 quarters, housing affordability improved in Canada. Not only was it the largest improvement in over 3 years, but it also ended the longest sequence of declining home affordability since the 1986-89 episode. Still, that is not to say that the median home is now affordable in Canada as the mortgage payment as a percentage of income (MPPI) registered at 64.6%, the second highest level since 1981. Feeding into the refinement, home prices declined for a second consecutive quarter and did so at the fastest pace since 1990. Although our 5-year benchmark mortgage rate used to calculate affordability rose by 17 bps in the fourth quarter, that was more than compensated for by falling prices and still rising incomes. The slight rise in rates nonetheless brought the benchmark rate to its highest level since 2008. Preliminary data for the first quarter of 2023 as well as our outlook for monetary policy in Canada suggest that we may be peaking in terms of mortgage interest rates. The current level for interest rates is restrictive and signals that home price declines are not over yet. Moreover, incoming data for the first quarter of 2023 confirms that prices have weakened while resale market data from CREA indicates that sales have significantly declined with listings concurrently increasing. Given our view for further declines in home price and decreasing mortgage rates, we expect affordability to improve in the coming quarters. HIGHLIGHTS: Canadian housing affordability improved for the first time in 9 quarters in Q422. The mortgage payment on a representative home as a percentage of income (MPPI) declined 2.1 points, a pullback from the 4.0-point increase in Q322. Seasonally adjusted home prices decreased 3.9% in Q422 from Q322; the benchmark mortgage rate (5-year term) rose 17 bps, while median household income rose 1.0%. Affordability improved in 8 of the ten markets covered in Q4. On a sliding scale of markets from best improvement to deterioration: Victoria, Hamilton, Toronto, Vancouver, Ottawa-Gatineau, Montreal, Winnipeg, Quebec, Edmonton, Calgary. This was the first time in 9 quarters that a majority of markets improved. Countrywide, affordability improved 0.6 pp in the condo portion vs. a 2.9 pp improvement in the non-condo segment. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/housing-affordability.pdf

Greg Lemoine

BROWSE

BROWSE

COMPLETE

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8/20/2025

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8/6/2025

Mortgage Renewals Won’t Shock the System, but the Pain Will Linger

8/1/2025

Bank of Canada holds policy rate at 2¾%

7/30/2025

BMO Survey: Summer Travel Spending Heats Up Despite Economic Concerns

7/25/2025

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7/23/2025

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7/18/2025

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7/16/2025

Scotiabank's Provincial Outlook: Trade War and Lower Immigration Set to Slow Provincial Growth

7/11/2025

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7/9/2025

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7/4/2025

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7/2/2025

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6/27/2025

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6/24/2025

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6/20/2025

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6/19/2025

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6/13/2025

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