Jobs & The Office. Real Estate vs. Construction
Good Morning,
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Market Highlights
Last month showed us the lowest number of homes sold in the month of October since the data set began, according to TRREB’s MarketWatch. Home sales were down just 5.8% since last year, but last October was a brutal month as well:
Number of Homes Sold (Source: TRREB / Chartography.ca)
Stat central
🏠 Less than 10%
The percentage of Canadian households who have a high enough income to afford the average Canadian home with an 80% LTV mortgage at current rates
💸 20,288,000
The number of jobs in Canada in October of 2023, up just 0.1% from the month prior, below expectations. Unemployment now sits at 5.7% as labour force participation remained unchanged.
🧔♂️ +31,100
The net number of construction jobs added compared to real estate, which lost jobs—calculated based on jobs added or lost in the Statistics Canada Sectors representing construction (+23,000) versus real estate (-8,100) in October’s real estate survey.
Construction and information, culture and recreation lead employment growth in October
Headlines
WeWork, once valued at $47 billion, files for bankruptcy “Office-sharing company WeWork filed for Chapter 11 bankruptcy protection in federal court Monday. Valued in 2019 at $47 billion in a round led by Masayoshi Son’s SoftBank, the company tried and failed to go public five years ago. It disclosed in an August regulatory filing that bankruptcy could be a concern.”
Urbanation’s Q3-2023 Condominium Market Survey shows that 9,568 units have been sold in the GTA year-to-date, down 47 percent from the same period in 2022. “New condo sales have been impacted by fewer new project launches. A total of 2,491 units launched for presale in Q3-2023, down 23 per cent annually,” the report read. “Year-to-date presale launches totalling 13,197 units fell 36 percent annually.”
Tweets & Charts
Return to Office Continues to Climb in Toronto
Average weekly - 55%
Peak Day - Wednesday 71%
Slow Day - Friday 29%
Per SRRA: “Mondays are beginning to attract more workers to the office while overall the Index shows a continued upward trend for the approximately 450,000 office workers in downtown Toronto.
Productivity claims on both sides of the “value of remote work discussion” base their opinions on limited data and often without functionality context. It is becoming evident from our research that remote work will find a place in a company’s policy on where people work. It still isn’t clear, however, how productivity is impacting those decisions.
Compare this to US return to office, and Toronto begins to stand out:
What we’re reading
Still Renovating: A History of Canadian Social Housing Policy I started reading this book after realizing that a lot (38-46%) of Canadian housing supply used to be generated by social housing policy and purpose-built rental construction stimulated by the National Housing Act (see below). 18% of that came from CMHC lending. I’ve had this feeling that CMHC’s ramping up of their MBS program for MLI select loans could ultimately become a recessionary make-work effort to keep the Canadian economy humming along, especially considering the continued strength in the construction sector.
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Catch ya next week!
-Padder