The Saretsky Report. December 2019

Steve Saretsky -

The reflation trade continued in December. Thanks to a swift easing of monetary policy from global central banks, even without the Bank of Canada’s help, asset prices have rebounded, with Vancouver housing being one of the many beneficiaries. Buyers have indeed stepped off the sidelines, prompting sales activity to jump a staggering 88% from last December. However, once again, take that number with a grain of salt considering how weak 2018 sales figures were. Although, from a more historical perspective sales were still 9.5% above the ten year average for the month of December, which suggests relatively healthy levels of sales activity. However, we can’t stress enough how segmented the housing market has become, there is a widening gap between what is happening in the luxury market and what is happening in the more affordable segments of the market. This phenomenon will form the basis of the report this month. Let’s dive in.

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The Canadian Economy

Steve Saretsky -

As we expected and discussed in last months report, the Bank of Canada raised interest rates another 50bps in October. Markets were pricing in a 75bps rate hike but the Bank of Canada failed to deliver, citing growing concerns around financial stability. It’s the first time in awhile they have...

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Continuing on the theme from last month, housing activity continues to slow as expected when the Bank of Canada raised interest rates by 100bps last month and instantly reduced borrowers purchasing power. Remember, over 50% of new mortgage applicants this year have been going with variable rate mortgages, in large...

Steve Saretsky -

I’m a bit later than usual in writing this report and it’s probably for the best. As of this writing on July 13th, the Bank of Canada raised interest rates a monstrous 100bps, the single largest increase since 1998. This will have significant ramifications for the housing market, not just...

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The Saretsky Report. December 2022