Liberal Government Disarray – December 17th, 2024

Liberal Government Disarray – December 17th, 2024

 
 

Weekly Digest

———

December 17th, 2024

 

Google Reviews

Have you or your clients worked with us? Do you enjoy our content? Help us grow our online rankings.

Please leave us a google review!

https://g.page/r/CQmtKLhn9B3cEAE/review

356 Reviews and Counting

 

Mortgage Insurance Changes

New Changes have now been put into effect as of yesterday morning. Quick reminder:

  • Purchase max is now $1,499,999 and would require a minimum down payment of $125,000. This is down from the prior down payment of $300,000 for a conventional deal.

  • 30 yr amortization is available on resale homes as long as there is one first time buyer on the file (if parents are co-signing a child, as an example)

  • For non first time homebuyers, the amortization is capped at 25 yrs

 

Liberal Government in Disarray

The Fall Economic Statement (FES) showed a much larger budget deficit for the previous fiscal year than previously estimated, but that was largely due to one-off charges related to indigenous settlements. Compared to Budget 2024, the new net spending measures for the current year total $5.5bn, or just 0.2% of GDP, mainly due to the GST holiday.

The budget deficit for the previous fiscal year was revised up by $21.8bn to $61.9bn, or 2.1% of GDP! Yikes…

The FES became the secondary event following the resignation of Finance Minister Chrystia Freeland yesterday morning. The planned tax rebates that Freeland disapproved of, which appeared to be the main source of tension with Prime Minister Justin Trudeau and which were estimated to cost close to $5bn. This did not make it into the FES.

With little in the FES that will move the needle for the economy, the attention shifts to the chance of Trudeau finally throwing in the towel and calling an election. He seems likely to be forced down that road sooner or later, with media reports suggesting that at least 60 Liberal MPs are now willing to put their names to a letter calling for Trudeau to resign immediately. Even if that strategy fails, Trudeau could face another no confidence vote in Parliament, triggering an election. Although the NDP still seem to be wavering on that option.

There is now a big shift in the polls. It won’t be a question of who wins but rather how big a majority the Conservatives secure. The main proposal put forward by the Conservatives is to scrap of the carbon tax, which would slash inflation by about 1%-point for a year.

 

 

Articles For Comment

I was asked to comment on the recent state of real estate affairs for both the The Globe and Mail and Canadian Mortgage Professional. You can find the articles below:

Globe and Mail – https://www.theglobeandmail.com/real-estate/toronto/article-real-estates-season-finale-may-see-a-plot-twist/

CMP – https://www.mpamag.com/ca/mortgage-industry/industry-trends/is-the-worst-now-over-for-canadas-mortgage-market/518014

 

GTA Real Estate Continued Strength

GTA real estate is continuing its resiliency. Median home prices are up $25,100 (1.5%) since Nov. 30, according to interim mid-month data from Wahi. Meanwhile, total listings are down a notable 9.5% to 20,084.

 

What’s Next?

Here are the latest next-meeting odds:

  • OIS markets have trimmed BoC expectations to just two cuts next year and no reductions for the Fed in January.

    • For the Bank of Canada meeting on Jan. 29:

      • 25bps cut: 58% chance

      • No change: 42% chance

    • For the Federal Reserve meeting on Dec. 18:

      • 25bps cut: 96% chance

      • No change: 4% chance

 

Current Interest Rates

CONVENTIONAL

  • 5 year fixed, 30 yr amortization – 4.54%

  • 3 year fixed, 30 yr amortization – 4.44%

  • 2 year fixed, 30 yr amortization – 5.74%

  • 5 year variable, 30 yr amortization – Prime – 0.50% = 4.95%

  • 5 year fixed, 25 yr amortization – 4.54%

  • 3 year fixed, 25 yr amortization – 4.44%

  • 2 year fixed, 25 yr amortization – 5.64%

  • 5 year variable, 25 yr amortization – Prime – 0.60% = 4.85%

 

INSURED

  • 5 year fixed, 25 yr amortization – 4.24%

  • 4 year fixed, 25 yr amortization – 4.49%

  • 3 year fixed, 25 yr amortization – 4.14%

  • 5 year variable, 25 yr amortization – Prime – .90% = 4.55%

 

Fast Facts

  • 57% – Rise in Canadian corporate insolvencies compared to last year. The jump has created a huge windfall for bankruptcy advisors, some of which now charge $1,300 an hour. 

  • $1.74 – Average hourly earnings of a Toronto Star reporter who went undercover as an UberEats courier. The reporter worked over 140 hours on the food delivery platform. 

  • $28,000,000 USD – How much the ruby slippers worn by Judy Garland in The Wizard of Oz sold for at auction. They’re now the priciest piece of movie memorabilia ever auctioned.