Time for your cheat sheet on this week’s most important stories.
Canadian Real Estate
Canadian Real Estate Prices Grew Over 25x Faster Than U.S. Prices Since 2005
Poor policy choices have led to a comically large gap between Canadian and US home prices. Canadian home prices generally move in line with US home prices, but disconnect in 2005. Instead of falling, prices accelerate in growth through to today. The result is prices have now grown over 25x faster than US home prices over the same period. Most surprising though, is half of these increases occurred in just the past 5 years.
Bank Of Canada Sees Real Estate Softening “Gradually”
Canada’s central bank sees real estate softening “gradually” in the coming years. They believe the recent surge is due a shift in buying preferences, due to low interest rates. Sudden demand for single-family homes is due to this temporary shift. As these purchases normalize, the organization expects sales driven by the preference swap to fade. Along with the slowing sales, they expect “price growth will soften.”
Canadians Collecting Unemployment Benefits Surges To A Record High
The number of Canadians collecting unemployment benefits surged to a record high. There were 1.24 million unadjusted claims in November, up 200.9% from a year before. The previous month represented the bulk of the increase, due to CERB ending. That means the bulk of these claims were a result of unemployment earlier this year. However, the fact that it’s still rising indicates there’s still more people getting hammered by this recession.
Bank Of Canada Index Shows Real Estate Is The Most Affordable In Years. It’s Wrong
The Bank of Canada’s affordability index shows real estate is the most affordable in years. No one’s buying that narrative, so what gives? The index shows households require 31.5% of their disposable income for housing in Q3 2020. The past two quarters have been the lowest since 2015, raising some eyebrows. It has to do with how it’s calculated, and the CERB driven boost to disposable income. In other words, the indicator is broken during the pandemic.
Canadian Real Estate Markets Are Low On Inventory, As Pandemic Slows New Listings
The pandemic is encouraging people to stay put, but the BoC is encouraging people to buy. The combination is leading to very high demand, in a low inventory market. Small cities like Trois Rivieres, Sherbrooke, and Gatineau are seeing inventory sell almost at the rate it’s listed. Western Canada is still slower than the national average, but are still unusually busy for this time of year.
Ontario’s Most Popular Real Estate Market Is Now Rural, While People Flee Toronto
Ontario’s most popular real estate market isn’t a new hip urban area, it’s the country. Outside of census metropolitan areas (CMAs) saw a net intraprovincial increase of 10,392 people in 2020. The rural increases were unusual, until the surge of young people exiting Toronto over the past few years. Toronto’s net loss of population to other parts of the province works out to 50,375 people in 2020. This is the largest net loss in decades of data, and possibly goes back much further. Despite the pandemic contributing to the trend, it actually started a few years ago. Right around when home prices took off.
Vancouver Real Estate
Vancouver Residents Were Moving To Rural BC, And Abbotsford Before The Pandemic
The pandemic has Vancouver residents seeking more space in rural B.C., but the trend goes back further. There were 45,481 people that left the Greater Vancouver region in 2019 for other parts of Canada. Rural B.C. is the number one place for those migrating, which saw a net inflow of 5,751 of residents. The trend is believed to have accelerated due to the pandemic, which has led to a distinct surge in rural home sales. It didn’t start during the pandemic though, with the trend going back a few years now, to when home prices took off.
Like this post? Like us on Facebook for the next one in your feed.
