Concerning Employment Data

Beginning with the good news, local real estate board data show that sales in four of Canada’s major cities rose by 9% month over month in July. This includes a 13% rise in Toronto. There was also a 6% rise in national sales and would suggest that the housing market is beginning to stabilize.

• National Average Price: $672,784 (-2.7% m/m and -0.6% y/y)
• Sales: 40,228 (+3.8% m/m seasonally adjusted)
• Inventory: 4.42 months – That’s down from the 6-year peak, but still 9% above the 10-year average.

The concerning development was the 40,800 drop in the Labour Force Survey (LFS) of employment in June, especially since most of the decline came from the private sector.

• Estimated job change: -40,800 (est. +13,500 | prior 83,100)
• Unemployment rate: 6.9% (est. 7.0% | prior 6.9%)
• Average hourly wages: +3.3% (prior 3.2%)

Another concerning trend is youth unemployment. The monthly decline was concentrated among youth ages 15 to 24, who are usually among the first to experience a labor-market downturn. Their unemployment rate reached 14.6%, the highest since September 2010 (outside of the pandemic). The employment rate for youth fell to the lowest since November 1998, excluding the years impacted by Covid-19.

“The share of people who have been unemployed long term (>27 weeks) was the highest since 1998 at 23.8%”—TD

Updated Rate Odds

Things were not any better in the US.

The weak numbers showed 289,000 fewer jobs than expected. This sent U.S. yields downwards and is causing downward pressure on rates.

This has caused a shift in rate projections moving forward

For the Bank of Canada meeting on September 17:

• 25 bps cut: 40% chance (versus 13% last week)
• No change: 60% chance

For the Federal Reserve meeting on September 17:

• 25 bps cut: 91% chance (versus just 38% last week)
• No change: 9% chance

Canada Housing Starts

Canadian housing starts increased to 294,100 units annualized versus the 265,000 estimate.

Montreal saw a 212% year-over-year increase in actual housing starts, driven by significantly higher multi-unit starts.

Toronto continued to struggle in July, with starts falling 69% year over year and 49% year to date, driven by a decrease in multi-unit and single-detached starts. Development charges are to blame for the declines.

iPro Realty Shuts Down

2,400 real estate agents are looking for new brokerages as RECO has shut down 17 iPro offices.

A reported $8,000,000 was missing from trust accounts at the time of the inspection.

Current Interest Rates

CONVENTIONAL

• 5 year fixed, 30 yr amortization – 4.44%
• 3 year fixed, 30 yr amortization – 4.24%
• 2 year fixed, 30 yr amortization – 4.84%
• 5 year variable, 30 yr amortization – Prime – 0.40% = 4.55%
• 5 year fixed, 25 yr amortization – 4.29%
• 3 year fixed, 25 yr amortization – 4.19%
• 2 year fixed, 25 yr amortization – 4.74%
• 5 year variable, 25 yr amortization – Prime – 0.50% = 4.45%

INSURED

• 5 year fixed, up to 30 yr amortization – 4.19%
• 4 year fixed, up to 30 amortization – 4.24%
• 3 year fixed, up to 30 amortization – 4.01%
• 5 year variable, up to 30 amortization – Prime – 0.80 = 4.15%

Fast Facts

• $30 billion USD – How much Tesla is paying Elon Musk in stock. The plan is designed to keep his focus on the company, and vests over two years.
• 25% – Price increase in ground beef in Canada over the last year.
• Shopify overtakes RBC as Canada’s most valuable company. After a stellar earnings report, the Canadian e-commerce giant’s stock surged 21.5% and brought its market cap to over $275 billion.
• 6,100 — The number of GTA home sales recorded in July, up10.9% year over year and the highest sales for the month since 2021.