Immigration minister to rein in temporary foreign workers
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Market Highlights
"Immigration Minister to 'rein in' number of temporary foreign workers coming into Canada in 2024. Immigration Minister Marc Miller says he plans to control the number of temporary foreign workers coming to Canada in the new year, adding the system has “run a bit rampant for far too long.” - from an Article in The Globe & Mail
Is immigration tapped out? When you break apart the components of immigration - you can see that PR (permanent residence) as a portion of total growth is below 2022 numbers, yet NPR (non-permanent resident) is skyrocketing:
It is worth noting that non-permanent residents cannot purchase homes, and so this growth materializes in increased rents, not increased prices. I did a full article on this here:
Stat Central
💰 $ 471 million
Toronto will get nearly half a billion dollars under a federal housing agreement – the largest payment yet to a municipality from Ottawa’s Housing Accelerator Fund, which requires cities to loosen zoning rules that protect neighbourhoods dominated by single-family homes.
📈 % 200
A report by TD Economics predicts that debt-to-income ratio in Ontario & BC has surpassed 200%.
👔 455
455/500,000 new Canadians were skilled trades. Of the more that 500,000 people that came through the PR program only 455 of them were skilled trades making up 0.1% of admissions. At the same time, around 20% of Canadas existing construction workforce is set to retire in the next decade.
Headlines
Bank Of Canada To Drop Interest Rate To 2.25% By 2025: TD The Bank of Canada (BoC) will drop its policy interest rate to a much more attractive 2.25% by 2025, according to a recent forecast from TD.
The long-term forecast, written by TD CFA James Orlando and Director Thomas Feltmate, predicts that inflationary pressures will ease over the medium term, allowing the central bank to cut its policy rate back to the neutral rate of 2.25%.
This would cut the interest rate, which currently sits at 5%, by more than half — a move that would be extremely welcomed by borrowers saddled with, in many cases, prohibitively high mortgage payments.
Bank Regulator Stands Firm on Mortgage Renewals: No Relief on Stress Test In 2016, the Canadian government introduced the mortgage stress test as a vital tool to curb risks associated with mortgage lending, especially when the Canadian real estate market experiences higher prices and lower interest rates. It was also amended in 2021 to require borrowers to prove they can maintain mortgage repayments that are 200 basis points above the contracted rate.
The mortgage stress test maintains two thresholds: a minimum qualifying rate (MQR) and an interest rate that is two percentage points higher than the borrower’s mortgage rate. As a result, today’s homebuyers could be experiencing rates between seven and nine per cent.
A chorus of housing and finance arguments argue that it is time to ditch or relax this measure as interest rates have risen to their highest levels since before the global financial crisis. Indeed, when the policy was introduced nearly a decade ago, mortgage rates were nearly half of today’s rates. Since July, the conventional five-year fixed-rate mortgage lending rate has been around six per cent.
Better paths to affordable housing than rent controls: “In this critical moment, Alberta cannot afford to pursue failed policies that make the housing challenge worse. Knee-jerk policies like rent control would have a devastating impact on housing construction and our entire economy. These policies would stall construction and increase the gap between housing supply and demand, and ultimately slow the economy down.”
Tweets & Charts
What we’re reading
What does economic evidence tell us about the effects of rent control?
Immigration Canada: Evolving Realities and Emerging Challenges in a Postnational World
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Catch ya next week!
-Padder