ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
July 3, 2023 | The Clock is Ticking
Happy Monday Morning! Headline inflation dropped like a stone in the month of May, now down to 3.4%. Mortgage interest costs surged 30% and remains the largest contributor to the year-over-year CPI increase. Strip out self inflicted mortgage interest cost, and CPI sits at 2.5% in May, back within the Bank of Canada’s control range […]
June 26, 2023 | There Will be Blood
Happy Monday Morning! Perhaps one of the most fascinating stories of the year has been the resiliency in the nations housing market. Prices have bounced sharply since the depths of the 2022 bear market, surprising even the housing bulls. This is no bueno for the Bank of Canada who is desperately trying to reign in […]
June 12, 2023 | The Firm Grip of Tiff Macklem
Happy Monday Morning! The Scotia guy was right, and the Bank of Canada delivered with another rate hike. It was only 25bps but the signal sent shockwaves through the bond market. It’s incredibly rare for a central bank to raise rates, pause, and then start hiking again. Pauses are almost always met with inevitable rate […]
June 5, 2023 | Sacrificial Lambs
Happy Monday Morning! The Canadian economy grew at an annualized pace of 3.1% in the first quarter, surprising to the upside and trumping the Bank of Canada’s growth forecasts. Four hundred basis points and the economy still hasn’t rolled over. This is prompting calls for the Bank of Canada to move off the sidelines […]
May 29, 2023 | Money at Stake
Happy Monday Morning! The blistering hot spring market, which has been plagued by a twenty year low in new listings across the country is finally starting to simmer. This is welcoming news for home buyers, whom instead of competing with six other buyers might only have to compete with three other groups on offer night. […]
May 22, 2023 | No Need to Panic, Yet
Happy Monday Morning! Inflation came in hotter than expected in April. Headline inflation ticked in at 4.4%, well above the 4.1% that was expected. It was the first month over month increase in the rate of headline inflation since June 2022. Naturally, panic ensured shortly thereafter. Markets immediately removed their expectations for a rate cut […]
May 15, 2023 | Nowhere to Hide
Happy Monday Morning! Anyone following this newsletter since about January knows that the housing market has surged back to life. Inventory has fallen off a cliff at the same time buyer sentiment has rebounded, coinciding with the BoC’s Tiff Macklem taking his foot off the gas. In the GTA, home sales ripped 27% month-over-month in […]
May 8, 2023 | Moral Victories
Happy Monday Morning! We get readers of all stripes on this newsletter. Policy makers, bankers, property developers, and every day people trying to figure out what’s going on in the crazy world of Real Estate up north. We’ve hit nearly seven thousand subscribers now which i’m incredibly grateful for. I’m not sure if David Rosenberg […]
May 1, 2023 | Cigarettes and Housing
Happy Monday Morning! We’ve talked a lot about the recent mismatch between population growth in this country and the ability to deliver enough new housing supply to not only meet demand but actually moderate price growth. Housing is all about supply and demand after all. We’ve tried to obliterate demand but it seemingly won’t go […]
April 24, 2023 | Sentiment
Happy Monday Morning! We’ve talked a lot about immigration. Remember, the Feds targeted 430,000 permanent residents in 2022 and hit those with ease. Those targets have been set even higher moving forward. However, the real issue here is these figures do not include non-permanent residents. It seems strange to omit these people considering the fact […]
April 17, 2023 | Suckers Rally?
Happy Monday Morning! For the first time in a year Canadian home prices ticked higher. Monthly data published by CREA noted a very modest 0.2% month over month increase in national home prices. Source: Ben Rabidoux However, regular readers here know this has been ongoing for several months now. Prices in most major markets, across […]
April 10, 2023 | Missing Middle
Happy Monday Morning! A few weeks ago I wrote a post called Everything is a Choice. I argued that many of the housing issues we are facing today are policy decisions. They are choices made by elected officials. Whether it be interest rates, immigration policy, taxes, mortgage underwriting standards, or municipal zoning. Many of these issues […]
April 3, 2023 | Dissenting
Happy Monday Morning! Everywhere you scroll these days there is some debate about the housing mess, people arguing on social media, all levels of government pointing fingers and blaming each other for the housing crisis. “Vote for me and i’ll fix housing.” It is all political theatre. Case in point for those following along at […]
March 27, 2023 | Everything is a Choice
Happy Monday Morning! Many of the issues we are facing today are policy decisions. They are choices made by elected officials. While I believe most policy makers are well intentioned it doesn’t mean we should not hold them accountable when mistakes are made. After all, elected officials are put in place to serve the best […]
March 20, 2023 | Gone Missing
Happy Monday Morning! National housing data dropped for the month of February, and there’s a lot to unpack here. Home sales plunged 40% year-over-year in February, coming off a blistering hot market this time last year. When you zoom out further it was the weakest February since 2009. However, there’s a caveat. New listings utterly […]
March 13, 2023 | Gradually, then Suddenly
Happy Monday Morning! Central banks finally broke something. After leaving rates hovering near zero for over a decade and engaging in trillions of dollars worth of QE (Quantitative Easing) you can’t simply raise interest rates by 400bps in less than a year without something going boom in the night. It was never a matter of […]
March 6, 2023 | Extend and Pretend
Happy Monday Morning! Canadian banks reported first quarter earnings this past week. Those earnings provided an important glimpse into what’s shaping the nations housing market. Deep in the footnotes, CIBC reported that $52-billion worth of mortgages – the equivalent of 20% of the bank’s $263-billion residential loan portfolio were in a position where the borrower’s monthly payment […]
February 27, 2023 | Banking on the Gravy Train
Happy Monday Morning! Some good news on the inflation front in Canada this past week. Headline inflation ticked in at 5.9% year-over-year, below market expectations of 6.1%. Inflation in services, which is one of the key figures policymakers are watching, eased to 5.3%, from 5.6% in December. The Bank of Canada’s preferred median and trim […]
February 20, 2023 | Social Crisis
Happy Monday Morning! National housing figures dropped this past week, and it wasn’t pretty. January home sales fell 37% year-over-year, a sharp decline from the blistering hot bull market of January 2022. When you zoom out further, this January was the slowest since 2009. However, balancing this out was a dearth of supply trickling to […]
February 13, 2023 | Swimming Naked
Happy Monday Morning! Those holding their breath for an easing in mortgage rates were delivered some tough news last week. The Canadian labour market added 150,000 jobs in January, more than TEN times economist estimates. Let’s not forget that December jobs numbers were TWENTY times estimates. Just what the hell is going on here? Either […]
February 6, 2023 | No Bull, Caution Ahead
Happy Monday Morning! Lots of chatter these days about increased activity in the housing market. It’s true open houses are busier, stale inventory that’s been sitting for months is suddenly under contract, and some new listings are fetching multiple offers. Quite a difference four weeks can make. Is this the end of the housing bear […]
January 30, 2023 | Finding a Bid
Happy Monday Morning! As expected, one and done from the BoC this past week. Here’s Tiff Macklem, “With today’s modest increase, we expect to pause rate hikes while we assess the impacts. To be clear, this is a conditional pause. Its conditional on economic developments evolving broadly inline with our outlook.” For those playing along […]
January 23, 2023 | A Healthy Cleansing
Happy Monday Morning! We got more encouraging news on the inflation front. Consumer prices in Canada fell on a seasonally adjusted basis, dropping -0.1% month over month, the first drop since July 2020. Yes, annual inflation still looks very high at 6.3%, but that only tells us what happened a year ago. We discussed these big […]
January 16, 2023 | Big, Fat, Laggy Indexes
Happy Monday Morning! Canadian inflation data drops this week on Wednesday, January 17th. This will be an important headline given that the Bank of Canada is set to meet the following week on January 25th. As of right now the market is still expecting a 25bps rate hike, but that could change if CPI comes […]
January 9, 2023 | Brace for a Year of Volatility Ahead
Happy Monday Morning! Back to our regularly scheduled programming after a few weeks off during the holidays. Last year was an eventful year across the Canadian Real Estate spectrum to say the least. I figured i’d start off the New Year with a quick sentiment check. And the survey says… things are going to get […]