It’s time for a cheat sheet on this week’s top stories.
canadian real estate
Canada has yet to see the full impact of central bank rate hike: National Bank
The impact of the Bank of Canada’s (BoC) interest rate hike has not yet been fully felt. This was an acquisition from National Bank, one of Canada’s six largest banks. It takes 18 to 24 months for monetary policy changes to be fully reflected in the market. The first rate hike of this cycle was just 17 months ago, so existing rate hikes will impact the economy for months to come. Economists at the bank say 43% of the impact is still to come.
Politicians want Bank of Canada to ease interest rates, but it shouldn’t
Politicians are blaming inflation for central bank interest rate hikes, but that is a big mistake. Bank of Canada (BoC) interest rate hikes are of particular concern when it comes to mortgage payments, and are often cited as a reason for worsening housing affordability. We cover the basics of monetary policy, how long it takes for monetary policy to work, and data points that are misquoted to explain how rising interest rates contribute to the erosion of affordability. In fact, virtually all evidence shows that low interest rates are the cause of affordability problems.
Canada cannot double housing production. Can’t even stop the drop: BMO
BMO Capital Markets is warning investors that talk of doubling housing production means little. The latest data point to support their claim is construction investment, which is down 27% from last year. Despite the population boom, new home construction also declined. Despite promising to double construction, production has actually slowed. So instead of doubling down on construction, banks should focus on preventing collapse, he quipped.
Bank of Canada leaves interest rates unchanged but raises inflation outlook
The Bank of Canada kept the overnight interest rate unchanged at 5.0%, in line with market expectations. Slower consumer spending and economic growth are just some of the reasons for holding off on raising interest rates, but he stressed that further rate hikes may be necessary. That possibility is not as remote as many think, given that the central bank has also raised its inflation outlook.
B.C. moves immigration quickly to ease Canada’s real estate agent shortage
Is British Columbia trying to address labor shortages in key industries such as health care, finance, social services and real estate sales? New legislation in the province would help regions with key talent shortages The aim is to speed up qualification certification in the state. Of the 29 eligible occupations, approximately one-tenth are related to real estate sales. Given the state’s typically large number of industry registrants, many wonder where this shortage is coming from.