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Tax Policy Illusions
Many groups have been cast as villains in Canada’s housing affordability narrative—foreign buyers, speculators, investors, and owners of vacant properties have all been blamed for driving up prices. However, recent data from Statistics Canada suggests that when it comes to homeowners who “flipped” their properties, that narrative is full of holes. Statistics Canada analyzed properties…
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It’s Looking A Lot Like 25 Basis Points
The upcoming Bank of Canada policy meeting on December 11 has sparked debate: Will the Bank cut rates by 25 basis points or 50 basis points? Since our last interest rate update, the federal government has announced a stimulus package. This package initially had two parts: a short-term selective GST holiday and a set of…
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The Evolution of the Canadian Mortgage Market: A Brief History – Part 2
In the first installment of our series, we examined the shifting roles of key players and the legislative changes that positioned chartered banks to dominate the Canadian mortgage market. In this second and final installment, we delve deeper into the rise of banks and trusts as mortgage lenders, the emergence of the five-year mortgage as…
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Slow and Steady Housing Starts Won’t Solve the Housing Crisis
In June 2022, CMHC estimated that Canada needs to build 5.8 million housing units by 2030 to restore housing affordability. The current pace of construction is not anywhere near this level, and there are signs we could see a falloff in condominium construction. The industry has focused on delivering smaller units that met the needs…
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The Evolution of the Canadian Mortgage Market: A Brief History – Part 1
In the first installment of our two-part series, we explore the evolving roles of key market players and the legislative changes that paved the way for chartered banks to dominate the Canadian mortgage landscape. The evolution of the Canadian mortgage market is far more nuanced than the simplified portrayal presented in a recent speech by…
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Is Powell Signalling a Pause?
In a recent speech, Federal Reserve Chair Jerome Powell commented that, “the economy is not sending any signals that we need to be in a hurry to lower rates.” However, the market didn’t react much to his comments, since fixed income investors had already determined that, given the strength of the economy and recent inflation…
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Are We Tinkering Enough with the Mortgage Market?
In a recent speech, the Bank of Canada’s Senior Deputy Governor Carolyn Rogers cautioned about “tinkering too much with the mortgage market.” My concern is that we are not tinkering enough. Rogers pointed out that, based on current mortgage rates and average mortgage size, a borrower stretching their amortization from 25 to 30 years could…
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