04/13/2023
📕 THE RENNIE LANDSCAPE - SPRING 2023
Our team dropping 💎 on us.
Key Insights
💸economy
THE LABOUR MARKET, BOTH NATIONALLY AND LOCALLY, REMAINS RESILIENT
📈 rates
INFLATION AND INTEREST RATES ARE UNCOMFORTABLY HIGH, with the Bank of Canada having most recently held its overnight rate at 4.50% while continuing quantitative tightening to keep longer-term rates elevated. Inflation has been declining of late and is expected to fall further, with the Bank of Canada expecting inflation to reach 3% by the middle of 2023.
💲 credit & debt
THE VOLUME OF MORTGAGE ORIGINATION IS SLOWING, as higher interest rates have gummed up housing market activity. Debt-service ratios, while rising, are in check and mortgage arrears are near all-time lows. The volume of outstanding variable-rate mortgages has grown and some borrowers are making payments that do not cover their interest costs, causing their outstanding balances to grow.
👨👩👧👦 demographics
CANADA AND BRITISH COLUMBIA ARE GROWING FASTER THAN EVER. as international migration has reached historic levels. Expect additional growth in permanent resident additions and permit holders, with BC set to accommodate an outsized share of them.
🏠 housing
THE AVAILABILITY OF MORTGAGE- FREE EQUITY IS IMPACTING OUR HOUSING MARKET, to the tune of billions of dollars being released annually in Metro Vancouver. Watch resale prices as a leading indicator to pre-sale activity: when the former rises, the latter follows, and vice versa.
New purpose-built rental housing construction is increasing after years of being dormant, but it's way behind on a per capita basis. Foreign buyers may be banned from purchasing today (mostly), but many purchased before the ban took effect on January 1st.
📑 policy
WITH MANY OF THE MAJOR POLICY ANNOUNCEMENTS OF 2022 NOW IMPLEMENTED, governments will be watching to see how their policies fare. British Columbia, meanwhile, is looking to preserve its rental housing stock with the addition of the rental affordability fund.
Link to the full issue is in my bio
