Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canadian Real Estate Markets Overheat (Again), Government Cities Tighten Most
Canadian real estate markets are starting to heat up (again), but mostly just in government towns. A look at the sales to new listings ratio (SNLR) for major markets across the country shows that cities like Ottawa, and Victoria saw demand surge the most, relative to inventories. That’s no coincidence—it was the first month since the government rolled out minimum in-office days to bolster real estate in those very same markets. Combined with lower rates and new mortgage rules arriving this month, homeowners and investors may be experiencing a little wave of FOMO. It’s notable that demand in Toronto and Vancouver picked up, but remains in balanced territory.
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Canadian Household Debt Outpaces GDP As Mortgage Borrowing Returns
Canadian interest rates are stimulating a lot more borrowing, but it isn’t producing the economic growth it should. Household debt reached a whopping $3.01 trillion in October, up 3.7% from a year before. Even after adjusting for inflation, household debt is now greater than GDP and advancing at a much faster pace. A deadly combination that’s likely to produce a long-term drag on the economy, especially as policymakers implement more leverage tools such as 30-year mortgages.
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Canadian GDP Shows Surprising Growth Driven By Real Estate, More Upward Revisions
Canada’s economy is growing faster than expected as it returns to leaning on real estate for growth. Monthly real GDP grew 0.3% in October, beating the market’s consensus estimate of just 0.1% over the same period. September was also revised to show 0.2% growth, more than double what was originally reported. The country’s national statistics service reported that 12 out of the 18 sectors showed growth, but just a handful of sectors provided the bulk of the move—real estate being one of them.
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