Weekly Digest

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October 21st, 2024

Partner Trip for 2025

April (Spring) 2025, our annual realtor trip will be held in Nashville, Tennessee.

Qualifying is easy. Send $1,500,000 in total closed mortgage business to automatically qualify.

To date, we have 5 realtors who have already qualified.

Inflation Numbers

The downside surprise of CPI bodes well for Wednesday’s meeting.

The fall in headline inflation to 1.6% left it below the consensus estimate of 1.8%. A drop is gasoline prices of 7% m/m along with annual energy inflation falling to -11% (from -5%) were helpful benchmarks.

Shelter prices rose by just 0.1% m/m in seasonally adjusted terms, the smallest gain in almost two years. That was largely due to weak rent growth, which rose by just 0.2% m/m. This is likely related to the cap on international student numbers at the start of the academic year.

Odds For Wednesday

Most mainstream economists have now pivoted Wednesdays meeting to a 0.50% cut. In the OIS market, a 0.50% cut has a 76% implied probability.

Easing of this magnitude would meaningfully improve the odds of a quicker return to Canada’s 2.75% neutral rate.

As rates stay elevated;

• mortgages, car loans, and other debts are more expensive relative to people’s wages

• people are more incentivized to save than spend, and

• businesses kill many projects and investments.

Condos Continue to Struggle

Over the last 20 years, the average proportion of Toronto’s unabsorbed pre-construction units was 30% per year. Since 2022 Q2, Toronto has now hit 50%. Overall, Canada’s main real estate challenges seem to be focused in the Toronto condo market.

Current Interest Rates

CONVENTIONAL

• 5 year fixed, 30 yr amortization – 4.40%

• 3 year fixed, 30 yr amortization – 4.50%

• 2 year fixed, 30 yr amortization – 6.00%

• 5 year variable, 30 yr amortization – Prime – 0.70% = 5.75%

• 5 year fixed, 25 yr amortization – 4.40%

• 3 year fixed, 25 yr amortization – 4.50%

• 2 year fixed, 25 yr amortization – 5.95%

• 5 year variable, 25 yr amortization – Prime – 0.80% = 5.65%

INSURED

• 5 year fixed, 25 yr amortization – 4.39%

• 4 year fixed, 25 yr amortization – 4.49%

• 3 year fixed, 25 yr amortization – 4.29%

• 5 year variable, 25 yr amortization – Prime – .95% = 5.50%

Fast Facts

• 83 – The number of operating cranes in Toronto’s downtown core as of quarter 3. This puts the City’s crane count at almost twice that of its nearest North American competitor.

• 65% – The share of smaller condo units (<600 sq.ft) in Toronto that are investor-owned.

• $3,023 – The average rent for apartments in Vancouver in September, marking a year-over-year decline of 9.5%.

• 6.57% – The increase in construction costs recorded in Calgary between July 2023 and July 2024.

• 2,983 – Drop in international students enrolled at universities in Atlantic Canada this school year compared to 2023-24, an 11.4% decline. Nova Scotia saw the biggest drop.