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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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Have We Reached a Tipping Point?
In the lead up to the Bank of Canada’s June 6 meeting, market expectations for a rate cut climbed to around 80 per cent. Initially, analysts were uncertain about the prospect of a cut, but the consensus shifted following a weaker-than-expected first-quarter GDP report. The Q1 GDP miss is compounded by a downward revision to…
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What Will End Canada’s Home Affordability Crisis?
The Bank of Canada has not yet declared victory over inflation. While we are likely close to seeing the first rate cut by the central bank, potentially as early as June or July, the market remains in a state of suspended animation, facing numerous challenges: Housing prices, although off their pandemic highs, remain elevated and…
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Repo Market Trading – Nothing to See Here
The Bank of Canada produces a Financial Stability Report to assess the resilience of the domestic financial system and identify risks that could undermine its stability. One item highlighted in the report is the growth of asset managers’ leverage over the past 12 months, primarily driven by an increase in hedge fund repo activity. These…
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Addressing Affordability Challenges – Longer Term Mortgages are not a Panacea
Loan characteristics vary significantly across nations, with differences such as variable rate loans, foreign exchange loans, or interest-only loans. For example, in countries like Poland, variable rate products are predominant, whereas in Belgium and Denmark, most mortgages have fixed-rate periods exceeding ten years. A recent report by Desjardins suggests that we would not have seen…
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Inflation Cooled in April. Is it Enough to Sway the Bank of Canada?
The headline annual inflation number for April was 2.7%, which was broadly in line with expectations and marked the fourth consecutive month of easing. The better news was that key core inflation measures all came in below 3%. Each measure rose by 0.1% month-over-month, and their three-month trends were below 2% on an annual basis,…
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No Immediate Relief in Sight for Soaring Rents
In April, average asking rents for all residential property types in Canada remained near record highs, reaching $2,188 per month, marking a 9.3% increase compared to the previous year. However, there were indications of easing in certain markets within the Greater Toronto and Hamilton Area (GTHA) and surrounding areas, particularly in 1-bedroom and, in some…
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