Winter is here - is the worst behind us?
Good Morning & Happy New Year!
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Market Highlights
House prices are up year-over-year in Toronto and many other Canadian markets, but trending down on a monthly basis. We’re likely about to hit the bottom of the market on a volume basis (not price) in December and January.
The question becomes whether or not we’ll see prices fall into their long-term channel. It took 40 months for prices to recover their 2017 peaks. It took 12 years for prices to recover their 1989 peaks. What hand will fate deal us this time around?
Stat Central
💰 $1.2 billion
30 of Ontario's largest municipalities will fail to qualify for a share of the government's $1.2 billion Building Faster Fund in 2024 because their housing start numbers in 2023 fell short of the mark.
📈 24%
Nanos Research found that one in two Canadians with a mortgage say they are concerned (24 per cent) or somewhat concerned (28 per cent) about the ability to make their mortgage payments when their mortgage renews.
The data shows that younger Canadians between 18 and 35 years old are more likely to be concerned (29 per cent) or somewhat concerned (34 per cent) about mortgage payments.
👔 4.4 million
Approximately 4.4 million Canadians currently own an investment property
Headlines
Toronto Sees Second-Highest Building Cost Increase In The World Construction costs have risen dramatically in Toronto over the past couple of years, a new global ranking shows.
Australian price comparison service Compare the Market used data from construction tenders to calculate the cost of building materials in various global cities, and found that costs in Toronto spiked 40.5% between January 2020 and August 2023.
Toronto was second in the ranking of 25 cities only to Prague in the Czech Republic, where costs are up 49.3%. Singapore in the Republic of Singapore was third in the ranking, with building costs up 32.8%
What to Expect in the 2024 Real Estate Market In this great breakdown by Zolo they look at things like 5 Things to Do Now to Prepare for 2024, and also touch on buying, selling and inflation.
It explores the interest rate environment , when and what a rate cute looks like and how it effect home prices and present a great opportunity for investors.
Canadian Economy Dangerously Concentrated In Real Estate, But Gov Wants More Canadian real estate sales are slow but the industry is still swallowing the country’s economy. Statistics Canada data shows residential investment gained in Q3 2023. The country’s economy is now significantly more reliant on housing than the US during the 2006 housing bubble, and it’s getting worse. Especially as policymakers attempt to slant incentives towards further concentration. Concentrating resources amplifies risks, producing larger consequences for the economy. It’s like they’re doubling down their bet on a housing bubble.
Tweets & Charts
What We’re Reading
A comprehensive retrospective of CMHC housing reports: What We Learned
This article serves as a retrospective, summarizing the insights gained from various reports in 2023 and shedding light on the difficulties faced by Canadians in terms of housing costs. In 2023, housing costs became increasingly difficult for many Canadians. This was a common problem that CMHC recognized and wanted to understand better. We investigated the challenges within the ever-changing housing landscape, especially considering the uncertain economic conditions of the time
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Catch ya next week!
-Padder