Latest Videos
The information you requested is not available at this time, please check back again soon.
Canada’s major housing markets are starting to recover, but one economist says a more pronounced recovery cannot be sustained until interest rates move significantly lower.
Federal Reserve Governor Lisa Cook said the rise in lending by nonbank investment firms bears watching but doesn’t appear to have created excessive risk for the financial system.
Shopping centre owner RioCan REIT reports Q1 profit up from year ago
The number of European banks taking account of environmental risks in their reserves for loan losses has more than tripled in a year, signaling an initial win for the regulator in its effort to prepare for climate change.
Canada is on track to add more newcomers with construction skills than in recent years, an early sign that a targeted immigration program is working — though still not quickly enough to close a massive housing supply gap.
Jan 4, 2024
, BNN Bloomberg
Toronto’s latest real estate figures suggest the housing market may be in the midst of a rebound, according a Desjardins economist, though he cautions that the full impact of elevated rates has yet to play out.
New data from the Toronto Regional Real Estate Board shows the city saw 3,444 home sales in December, an 11.5-per-cent climb compared to a year ago. The average price for a home climbed 3.2 per cent to $1,084,692.
Marc Desormeaux, principal economist at Desjardins, said he believes the numbers show Toronto’s real estate market may be on the upswing, as the Bank of Canada appears to have paused its rate hiking cycle.
“We are seeing some signs that perhaps the worst of the drag from the second round of monetary tightening is behind us in Toronto, but we’ll wait to see what happens in the spring real estate season,” he told BNN Bloomberg in a television interview on Thursday.
“We haven’t yet seen the full impacts of higher rates on the broader Canadian economy.”
New listings declined in the month, with 3,886 in December compared to 4,161 a year ago. Desormeaux suggested the generally high number of listings shows Toronto homeowners are struggling to keep up with the high interest rates.
“For folks who bought a home in 2019 or 2020 at ultra-low rates, if they’re on a fixed five-year term, then they’re going to be renewing at much higher rates in the next few years,” he said.
“We see a situation in which a much larger share of Canadians’ income goes to the service of mortgage debt. That means there’s less money available for other types of consumer spending.”
RATE OUTLOOK
Desormeaux predicted some relief on the horizon in the form of rate cuts. He expects the Bank of Canada will start cutting interest rates in the middle of 2024, with its trendsetting rate coming down to around 3.5 per cent by the end of the year.
“It’s important to note that we’re not anticipating that we’re going back to ultra low rates, below one per cent on the overnight rate per instance,” he said.
“That means the mortgage renewal question will be a big one for the Canadian economy over the next few years.”
The Bank of Canada’s next rate announcement is scheduled for Jan. 24.
Related
