Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canadian Unemployment Surges For Young Adults & Recent Immigrants
Canada went from a shortage of workers to a surplus driving unemployment in just a few months. In 2022, Canada ramped up immigration with the idea it would fill rising job vacancies. Since then, the number of vacant jobs have declined sharply but immigration has run at a similar clip. As a result, the unemployment rate has risen sharply for recent immigrants and the young adults they compete with. Both demographics are now facing an unemployment rate double that of the average person, resulting in lower wage pressure at a time when the cost of living is soaring for these groups.
Canadian GDP On Track To Outperform, Weakness Confined To Housing
The death of the Canadian economy has been greatly exaggerated. At least when it comes to real GDP, which is on target to beat the central bank’s expectations. When combined with inflation’s sudden acceleration, the odds of a second rate cut in July are getting more slim. One of the few areas providing a drag on the economy is also one of the most surprising—housing. Despite more and more subsidies, and rapid population growth, this area is coming in slower and slower. Though state-subsidies supporting inefficient market operations may be the cause of the slowdown in this particular area.
Canadian Mortgage Arrears Rate To Rise 50% In 2024: Fitch
Canadian mortgage arrears are expected to surge over the next few months. Credit-rating behemoth Fitch Ratings is forecasting the mortgage arrears rate will climb a whopping 50% higher by the end of 2024. It’ll be a relatively short surge, with the rate pulling back by the end of 2025. Though it’s not expected to return to the just-off-record lows that we’re currently experiencing.
Canadian Population Growth Rate To Fall 75%, Hangover To Come: NBF
Canada’s record-setting population growth seems to have appeared out of nowhere. After realizing the country’s economy is poorly equipped to handle such rapid growth, it’s set to disappear almost as fast. National Bank of Canada (NBF) notes the growth rate is set to average just 0.7% over the next 3 years. This is still nearly double the rate of the OECD average, but about a fifth of the rate seen last year.
A Third of Canadian First-Time Homebuyers Need 6-Figure “Gifts”: CIBC
Canadian homeownership is going from a rite-of-passage to a Victorian era-style privilege. A new analysis from CIBC found that a third of first-time homebuyers needed a gift from their parents to purchase a home. In addition to rising from just a fifth of consumers a few years ago, the size of gift has also climbed to an average of six-figures in 2024. The issue is spreading beyond first-time buyers—increasingly families upgrading are tapping their parents for a lot of help to upgrade their home. The bank notes that helping their kids is expected, but at the same time is increasing the wealth disparity between households.
Canadian Inflation Higher Than Expected, Odds Of A Rate Cut Fall
Canadian inflation is suddenly a lot higher than expected. Annual growth of headline CPI accelerated to 2.9% in April, adding 0.3 points from the previous month. Core CPI, preferred by the central bank for lower volatility, also showed a similar trend. Now barely within range of the Bank of Canada (BoC) target range, the likelihood of a rate cut in July is now slim as it risks reversing progress made.
Canadian Population To Hit 63 Million By 2073, Life Expectancy Falls Further
Canada’s national statistics agency is forecasting substantial population growth. Despite some measures to reduce the population growth rate, the latest Statistics Canada (Stat Can) forecast shows the current population is on target to hit 63 million by 2073. Of that population, between 21.9% and 32.3% will be 65 or older—an issue that could lead to substantially higher healthcare and dependency costs. The agency notes the pressure won’t be as obvious after 2030, when the demographic shift towards older households peaks.
Toronto Real Estate
Toronto New Home Sales Fall 71% & Inventory Rises, Weakest Demand Ever
Greater Toronto may be one of the fastest growing regions in the country, but no one can afford a home. New home sales fell 71% in May, with year-to-date sales now the worst on record. At the same time, inventories are now at the highest level reached in May over the past decade. While the trend is contrary to the population estimates on growth, it does reflect other similar metrics such as the rising residential and office vacancies.
