The Saretsky Report. April 2021

Steve Saretsky -

We have discussed in past reports the ongoing strength in the Canadian housing markets being largely attributed to excess liquidity and credit creation that was manufactured out of Ottawa. Commercial bank credit creation is running hot, thanks to Federal Government Guaranteed loans that have simultaneously been supported by the Bank of Canada’s Quantitative Easing Program. If this all sounds confusing, let me simplify. Essentially, banks are being asked to create new loans, with the full support of the government and the central bank. This has spurred new money creation, with the money supply in Canada growing by 19% year-overyear as of February. And so, it should hardly come as a surprise that national home prices, as measured by the Canadian Real Estate Associations home price index, is now up 20%. It appears policy makers might have overstimulated and they are now trying to reign in some of that generous support. In April we saw policy response from OSFI (the banking regulator),

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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...

Steve Saretsky -

It was another slow month for the Greater Vancouver housing market in September. While housing activity was historically low, there is still much to talk about across the housing spectrum. The volatility across global financial markets has been extreme and that is no doubt having a major influence on our...

Steve Saretsky -

There’s always lots to talk about in the Vancouver housing market, especially these days. We have plenty of updates this month on interest rates, trigger rates, and the investor/ rental market. Housing activity remains on the same course it’s been on over the past few months. Greater Vancouver home sales...

Steve Saretsky -

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