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Has CMHC Missed the Mark?
CMHC estimates that around 3.5 million net new housing units are needed by 2030 to restore affordability. While this figure has garnered significant attention, a recent study by the Parliamentary Budget Office (PBO) provides another take on this issue. The PBO notes that household formation grew to 460,000 net new households in 2023. Additionally, they…
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Should the Bank of Canada be Concerned About Rising House Prices?
When the Bank of Canada finally decided to cut its policy rate, it expressed concern that such cuts could lead to an overheated housing market. Some real estate industry experts are also forecasting a “material lift” in sales and “accelerated home price appreciation.” Despite these predictions, significant changes in major markets like Toronto are unlikely…
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Is a Tax Credit a Better Way to Support Social Housing?
One of the biggest challenges in Canada’s rental housing crisis is the lack of new affordable housing units being built. Despite efforts through the National Housing Strategy’s five programs, only 17,000 units were delivered after four years. This disappointing outcome is only a modest improvement over Ottawa’s track record in the past 30 years. For…
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Latest US Inflation Numbers are Good News
Paradoxically, good news is often bad news when looking at inflation. Positive trends like strong economic growth, low unemployment and high consumer confidence can have inflationary impacts. In the current environment, such ‘good news’ could lead the US Federal Reserve (the Fed) to delay any planned – and highly anticipated – rate cuts. However, recent…
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The Housing Market’s Matching Problem
Economics is largely about creating the right incentive structures. However, housing policy often overlooks this principle, resulting in significant mismatches between households and the available housing stock. This issue is evident in policies around both rental and housing supply. Average rents have been rising, and any efforts to increase supply will take years to have…
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Labour Market Data Support Bank of Canada Rate Decision
Despite adding 27,000 jobs in May, the labour market continued to soften as the unemployment rate rose to 6.2%. Job growth came from part-time employment, which increased by 62,000, while full-time employment was down by 36,000. Most of the new jobs were in the service sector, including retail, accommodation, and food services. However, construction saw…
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Making the Economics of Affordable Housing Pencil Out
For nearly twenty-five years, there has been a significant lack of new purpose-built rental construction. Instead, condos became the primary source of new rental stock. This divergence in construction activity is largely due to differences in how developers finance their projects and the difference in equity requirements between these types of construction. Unlike purpose-built rental…
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