Hanif Bayat
@HanifBayat
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CEO & founder of , 🇨🇦 personal finance encyclopedia. Former banker. PhD in Physics. Discussing economy, finance, real estate, entrepreneurship, etc.
Toronto, Ontario
Joined January 2018
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Pinned Tweet
Debating the 34% capital tax hike for entrepreneurs:
Who invests this money better?
1.
@tobi
, who built
@Shopify
, created 11,000 jobs & improved millions of lives.
or
2. The 🇨🇦gov, which spent $50M+ on an inconvenient app (Arrive Canada).
Thoughts?🤔
Oh wait, there is a
Message from a friend: “Canada has heard rumors about innovation and is determined to will leave no stone unturned in deterring it”
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Negative amortization stats from banks' Q3 2023 reports, where mortgage payments < interest:
BMO: $32.2 B; 22% Total Mortgage Portfolio
(up from $28.4 B in Q2 2023)
TD: $45.7 B; 18%
(up from $39.6 B in Q4 2022)
CIBC: $49.8 B; 19%
(up from $44.2 B in Q2 2023)
RBC & Scotia≈0
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Analyzing the largest 100 🇨🇦 public companies by combining their market cap:
1. Financial services + oil & gas sectors dominate, making up 31.4% & 15.5% of the market, respectively.
2. Tech companies contribute less than 10%, with Shopify alone accounting for half!
3. 100
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Canada Mortgage Renewal Stats
Until Aug. 2024:
Avg. each month ∼1% of all 7 Million mortgages in Canada will be renewed (∼70,000)
Aug. 2024 to July 2025:
The no. will increase to ∼1.5%/month (∼ 105,000)
% of Mortgages Renewing in 1 & 2 Years (July 31, 2023):
TD:
1 Yr: 9%
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🇨🇦 Population Growth vs. New Residential Units (1955-2023)
1. New construction lags behind recent population growth
2. New housing has stabilized at ~200K units/year for 50 years
3. Last 2 years saw unprecedented population growth
4. 1971's population boom was also remarkable
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🏦💰 5 Big Canadian Banks: $3.77T in loans!
$1.37T in 🇨🇦 residential mortgages (36%)
$0.9T lent in the 🇺🇸, mainly by TD & BMO (24%)
$0.68T loans to 🇨🇦 businesses & govs. (18%)
$0.3T lent outside 🇨🇦 &🇺🇸, mainly by Scotiabank (8%)
$0.24T 🇨🇦 HELOCs (6%)
$0.2T 🇨🇦 personal loans
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Politicians claim new capital gains taxes will align us with California & New York🤔
Not true!🚫
1. Capital gain tax exemptions for entrepreneurs:
🇺🇸 Up to USD$10M
🇨🇦 Up to CAD$1.25M
2. Total income taxes on CAD$500K:
🍁 Ontario: $231K (45%)
🇺🇸 California: $195K (39%)
🇺🇸 New
Chrystia Freeland is asked these excellent questions by Irene Galea of the Globe
@IreneHGalea
"analysis confirms the adverse effects of higher capital gains taxes..."
Canadians deserve answers to these questions that she avoided. She is driving innovation and entrepreneurs away!
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🇨🇦 Residential mortgage market shares:
🤔Points:
1. RBC holds 20% share of 🇨🇦 mortgage market, poised to increase to 21.7% if it acquires HSBC.
2. The Big 5 banks claim 69% of 🇨🇦 mortgage market.
3. Desjardins & MCAP market shares are close to BMO, exceeds National Bank's.
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Public vs total employees for 🇨🇦🇬🇧🇺🇸 (1976-2024)
• 1976-2000: Decline in public employee %
• 2000-2010: Public employee % rises slightly
• 2010-2023:
🇺🇸 drops to 14.6%
🇬🇧 drops to 17.8%
🇨🇦 increased to 21.5%
It is the highest since Oct 1995 (excluding April & May 2020)
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GDP per Capita: 🇨🇦 vs. 🇺🇸 (1960-2023) 📊:
1. GDP per Capita in 🇨🇦 often lags, except for brief periods in 1976 & 2011-2
2. Gap hit 30% recently, echoing 2020, 1997-2002, & 1962
3. 🇨🇦 vs 🇺🇸 relative purchasing power has been decreasing since 1980
Because, IMHO:
1. Robust
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Q1 2024 reports: Residential Mortgage Stats of Big 6 Banks+Equitable+ Desjardins
Total $1.58T in residential mortgages
(~80% of 🇨🇦 mortgages)
Remaining Amortization:
• 37.7% ($598B) >25-year
• 14.1% ($223B) > 35-year
• At least 5.9% ($94B) have negative amortization
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Canadian household debt (Oct. 2023):
📈 Surpassed GDP
📊 Highest % among G7 nations
In the past decade (2013-2023):
Household debt surged from $1.79T to $2.90T (���️62%)
Main driver: Mortgage debt soared from $1.18T to 2.16T (⬆️82%)
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Tax system must reward the makers, not the takers.
1. Not all rich people are competent or useful.
2. Yet, to build a rich economy, society must reward hard work & innovation with wealth.
Ignoring the 2nd point, is a fundamental issue with socialism🚨
As Thatcher said "The
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The ratios of avg. home price to avg. disposable income in 🇺🇸 & 🇨🇦
1975-2005: The ratio ranged from 6 to 9 in 🇺🇸 & 🇨🇦
Post-2006: 🇨🇦 ratio soared above 9, reaching 14 times of income! Why?
Maybe🤔:
#BoC
's too many rate cuts in 2008, while 🇨🇦 home prices didn't crash unlike U.S.
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The 🇨🇦money supply (M3) has quadrupled since Jan 2005, hitting $3.6T in Dec 2023!😲
Infographic:
1. Money supply (M3*) exponential growth (Yellow)
2. M3 components (Pie chart)
3.
#BoC
balance sheet liabilities (Navy blue)
Any surprise in Money Supply's exponential growth?
Not
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Housing markets in G7 countries: Inflation-adjusted prices for 1975-2023
1. Even after adjusting for inflation (PCE), 🇨🇦 home prices quadrupled (highest in G7!)
2. 🇬🇧 also experienced rapid growth due to factors like tough planning law, international investments & monetary
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Canada Mortgage Renewal Stats:
1st 6 month
Nov 1, 2023 to Apr 30, 2024:
Avg. each month ∼1.07% of all 🇨🇦 mortgages will be renewed: ∼75k/mo.
2nd 6 month:
May 1 to Oct 31, 2024
Avg. each month ∼1.36% of all 🇨🇦 mortgages will be renewed: ∼95k/mo.
12-24 months from now:
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"The devil is in the details"
40,700 new jobs 🇨🇦 in Feb 2024
Breakdown:
Employees +2,400
+18,800 in public
-16,400 in private
Self employed: +38,300
Nearly half of the job growth (47%) was in the public sector!
Unsustainable▶️below tweet
Jan to Feb 2024:
•
Public vs total employees for 🇨🇦🇬🇧🇺🇸 (1976-2024)
• 1976-2000: Decline in public employee %
• 2000-2010: Public employee % rises slightly
• 2010-2023:
🇺🇸 drops to 14.6%
🇬🇧 drops to 17.8%
🇨🇦 increased to 21.5%
It is the highest since Oct 1995 (excluding April & May 2020)
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Q1 2024 for 🇨🇦 Big 6 Banks:
Write-offs at a 2-year high!📈
While ample ACL buffers concerns, the trend points to loans becoming riskier due to:
1. High rates
2. Large loan volumes
Q1 2024 write-offs:
$BNS Scotia: $804M
$TD: $759M
$BMO: $533 M
$RY RBC: $454M
$CM CIBC: $445M
$NA
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Avalanche of mortgage renewals in 2025:
Residential Mortgage Renewal Stats* of
TD, Scotia, BMO, CIBC, National & Desjardins** $1.37T
($1,201B in 🇨🇦:∼60% of all 🇨🇦 +$167B*** outside 🇨🇦)
Feb-Jul, 2024 (6 mo): 6.8% of $1.37T
(∼1.14%/mo)
Aug 2024 to Jan 2025 (6 mo): 8.3% of
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5-year bond yield just hit 4.5%😱
Highest since early 2007!
What does this mean for our taxes?📊
Last 4 months (April-July 2023):
Gov. revenue: $146B
Interest Payment: $14.5B
∼10% debt-service-ratio
Soon, over 11% of our taxes will be used for Gov. debt interest!
#cndpoli
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🇨🇦 Inflation dropped to 3.1% in Oct, mainly driven by falling oil prices. Excluding energy, the inflation actually went up!😲
Inflation excluding energy:
Oct 2023: 3.82%
Sep 2023: 3.69%
Energy prices are driven by global factors, not
#BoC
decisions!
More
Strip out mortgage interest (why is this in the CPI??) and Canadian inflation is running at the grand total of a +2.2% YoY rate or pretty well on target. Let’s buy some chill pills for the Bank of Canada for a Christmas gift!
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The vacancy rate in Canada reached 1.5% by Oct 2023, the lowest in the last 38 years (excluding 2001)
Annual rent inflation is at 8%, while rent growth for turnover units (new tenants) reached 24%/yr😱
Highlights:
1. Latest vacancy rates: Toronto (1.5%), Montreal (1.5%),
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🇨🇦Credit card market update (2024 vs 2019):
1. RBC holds the largest market share.
2. TD saw a decline in market share since 2019.
3. CIBC's market share surged, thanks to its Costco partnership.
4. Beyond the big 6 banks, Canadian Tire, President's Choice & Fairstone
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#BoC
unlikely to consider a rate cut before July 2024
more:
Dividing (annualized) inflation data into two 6-month periods reveals a big inflation rise:
📈Sep. 2022 to Mar. 2023: 3%
📈Mar. to Sep. 2023: 4.4%
This suggests inflation won't decline fast!
We
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I was asked why the rising number of employees in the public sector is worrisome!?
These are the reasons:
1. Taxation and Economic Growth:
Taxes from the private sector are expected to fund not only public employee salaries but also other government expenses like old age
Public vs total employees for 🇨🇦🇬🇧🇺🇸 (1976-2024)
• 1976-2000: Decline in public employee %
• 2000-2010: Public employee % rises slightly
• 2010-2023:
🇺🇸 drops to 14.6%
🇬🇧 drops to 17.8%
🇨🇦 increased to 21.5%
It is the highest since Oct 1995 (excluding April & May 2020)
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There are 19,235 homes listed for sales in the GTA, up ~60% from 11,910 on Nov. 30, 2022, while sales lag behind last year's numbers! 🏡
#ToRe
home inventory has been over 19k for the past 6 weeks!
It looks like 19k+ sellers in the GTA are setting what they believe are the
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Q4 2023 reports:
6 Big Banks Residential Mortgages Stats
(Total: $1,433B)
Amortization > 25 years: 40.5% of all ($581B)
Amortization > 35 years: 16.4% of all ($235B)
Negative Amortization: 7.7% of all ($110B)
More:
$RY $TD $BNS $CM $BMO $NA
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The Canada 5-year bond yield has surged to its highest point in the past 16 years, a level last seen in Aug. 2007.
Given the correlation between fixed mortgage rates and bond yields, we may observe higher fixed mortgage rates.
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Evolution 6 big 🇨🇦 banks deposits: 2003-2023
2003: $996B*
2013: $2.4T
2023: $5.3T
Deposits cover both domestic & international
Top performer: TD 555%⬆️ in 20 yr.
King👑: RBC has been always 1st.
Least growth: CIBC
Main reason for TD success: Expansion in 🇺🇸 by acquisition of:
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Worrisome Stats:
Big 6 Banks Residential Mortgages July 2023
Remaining Amortization>25 years
(% of all mortgages)
RBC: 43%
TD: 48%
BMO: 46%
CIBC: 47%
National Bank: 28%
Scotia: NA
Remaining Amortization>30 years
RBC: 24%
TD: 26%
BMO: 30%
CIBC: 27%
National Bank: 1%
Scotia: 1%
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55% of all loans from 🇨🇦's banks are secured by real estate.
Market share of all loans ($4.3T) at federally (OSFI) regulated banks:
• Mortgages: 46.5% (one-fifth insured)
• Business Loans: 31.4%
• Personal Loans: 17.6%
• To Banks & Govs: 3.6%
(All figures cover both
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Canada's 5-year bond yield fell by 65 basis points (15%) in 1 month. Why?
After the Fed Nov. 1 &
#BoC
Oct. 25 meetings, the market thinks both Fed & BoC have completed their rate hikes for this rate-hiking cycle.
As a result, we may see slightly lower fixed mortgage rates soon.
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6 big 🇨🇦banks mortgage growth from 2013 to 2023:
• Ontario:⬆️102%
$367B to $742B
• BC:⬆️83%
$148B to $271B
• Prairies (AB, SK, MB):⬆️28%
$158B to $203B
• Quebec:⬆️57%
$101B to $159B
• Atlantic (PE, NL, NB, NS):⬆️66%
$33B to $55B
ON & BC's soaring mortgage debt raises
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Federal gov debt hit $1.34T, up 87% in 5 years! 📈
Current debt increase? $10B/month
Despite COVID-19 & although gov. debt differs from personal debt, 3 things are clear:
• Rising gov. debt is worrisome😨
• Taxpayers will eventually pay this debt interest💸
• Gov. deficits
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🇨🇦 The 65+ population is booming, and so is their presence in the workforce!🚀
📊From 4.9M in Oct 2012 to 7.4M in 2024, a 50% increase.
Their workforce participation rate rose from 6% in 2001 to 15% in 2024.
The reasons? Mainly improved health but also financial necessities.
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Interest payments=
9.16% of 🇨🇦 household disposable income, the highest since 1996!
• Negative Amortization Impact:
While total debt payment (principal + interest) as % of income, remains similar to 2019, interest payments have soared, why?
∼5% only pay interests on their
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Employment in 🇨🇦 by industry in 2023 vs 2003:
• Manufacturing jobs decreased from 14.3% to 8.7%, possibly due to offshoring & automation.
• Healthcare roles grew from 10.3% to 12.8%, likely due to an aging population.
• Construction jobs rose from 4.7% to 6.5%, possibly
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4.6% of the 🇨🇦 workforce is in finance & insurance🏦
Presenting stats for this sector's top 52 employers:
(Stats cover only their employees in 🇨🇦)
• Top 10: Big six banks, Desjardins & insurance companies.
• Companies like Scotia, Sunlife, & Manulife have larger workforces
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1/3
Scotiabank's Q4 report (Nov. 28, 2023):
High interest rates and economic challenges led to increased impaired loans, higher provision for credit losses, and a dip in the bank's net income.
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@arthurmemedaeva
@tobi
@Shopify
Completing your sentence: "There are many economists with PhDs in the government who rely on government funding, which might prevent them from being completely truthful!" 😉
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From the hot Calgary housing market to the cooling Toronto one, real estate varies widely by region.
By comparing Oct. sales-to-new-listing ratios (SNLR) for Canadian cities it is clear that the Ontario real estate market is freezing.
Note:
SNLR > 60% Seller's market
SNLR < 40%
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🇺🇸CPI remains high, impacting 🇨🇦 by potentially limiting 2024 rate cuts:
• Higher 🇺🇸 inflation➡️Fewer rate cuts in 🇺🇸
• Fewer rate cuts in 🇺🇸➡️Fewer rate cuts in 🇨🇦 to avoid a sharp rise in USD/CAD, why?
Stronger USD➡️Higher prices for imported goods ➡️ Rising inflation
🇨🇦
BREAKING: February CPI inflation rate RISES to 3.2%, above expectations of 3.1%.
Core CPI inflation fell to 3.8%, ABOVE expectations of 3.7%.
This is the 35th consecutive month with inflation above 3% and second straight increase.
A Fed pivot is becoming less likely.
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#ToRe
market is experiencing a slight freeze!❄️
Greater Toronto Area (GTA) months of inventory (MOI) hit 4.1 in Sept., the highest in a decade.
For Oct., GTA MOI is expected to inch closer to 5, given the current 20.5k active listings in GTA & an estimated ∼4400 sales.📈
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1. I agree with John that
@PierrePoilievre
video contains several simplistic statements & exaggerations.
2. However, I believe Pierre's solution is much better than Truedue's, mainly due to his superior financial vision.
3. IMO, the main cause of the housing bubble is the
There is no doubt Canada’s housing crisis got far worse under Trudeau
But suggesting that the cause for our crisis is QE and municipal gatekeepers is naive
And it doesn’t matter how big Pierre’s 💰 incentive is
Cities cannot control how many homes the private sector builds 1/
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Digitalization stats of 🇨🇦 big 5 banks:
1. Steady rise in digital adoption📈, more users opting for online banking
2. Digital/ATM transactions as a % of total climbed from 2018 to 2021, then leveled off from the COVID era in 2021 to 2024
3. CIBC takes the lead🥇
Provided by
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Big 6 Banks Q4 Reports
Residential Mortgages Stat (Oct. 31, 2023): A slight decrease in remaining amortization > 25 years since July 31, 2023.
Remaining Amortization>25 Years
(% of all mortgages)
RBC: 43%
TD: 45%
BMO: 45%
CIBC: 46%
National Bank: 28%
Scotia: NA
>30 Years
RBC:
Worrisome Stats:
Big 6 Banks Residential Mortgages July 2023
Remaining Amortization>25 years
(% of all mortgages)
RBC: 43%
TD: 48%
BMO: 46%
CIBC: 47%
National Bank: 28%
Scotia: NA
Remaining Amortization>30 years
RBC: 24%
TD: 26%
BMO: 30%
CIBC: 27%
National Bank: 1%
Scotia: 1%
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53.5% of the big 6 🇨🇦banks' deposits are not in Canadian dollars (CAD).
Oct 31, 2023:
Total: $5,480B
Inside 🇨🇦:
$2,546B: in CAD
$1,204B: in USD and others
Outside 🇨🇦 (Mainly in 🇺🇸)
$1,730B
All figures are in CAD.
Even 32% of all deposits inside 🇨🇦 are in foreign
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Median
#homeprice
in Canada is 46% higher than US while its median household income is slightly less than US!
Median home price:
Canada ≈ CAD$500k (excluding
#ToRe
&
#VanRE
≈$400K)
USA: CAD$343K (USD 265k)
Median household income:
Canada: CAD$73K
USA: CAD$80k (USD 61K)
The national median existing-home price for all housing types was $264,800 in August, up 4.6 percent from a year ago.
#NAREHS
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@wesSE22020
I believe the government has an 'overspending' problem, not a revenue problem. The housing crisis could have been addressed earlier by easing zoning restrictions and moderating the influx of immigrants. The government cannot continuously 'borrow more,' 'tax more,' and 'spend
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Market share of loans among 🇨🇦 major lenders:
1. TD & RBC (including HSBC) are tied at ~$927B each, holding 20.5% market share
2. Scotia, BMO, CIBC, Desjardins & National follow, each with over 5% market share
3. Other lenders each hold about 1% or less of the market share
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Since many asked after the last post:
Here we presented the property taxes for the 30 largest cities in Canada, considering TWO scenarios:
A. $700k property value
B. An averaged priced home in each city
(Effective property tax rates are calculated based on the analysis of over
In July 2023, we assessed 10,000+ 🇨🇦 properties, checking:
Effective property tax rate = property tax / fair value
Vancouver & Toronto have some of the lowest effective tax rates in 🇨🇦, standing at 0.27% & 0.36% respectively for a detached property.
More:
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Negative amortization (mortgage payments < interest) stats from banks' Q4 2023 reports:
Good News: TD & CIBC no. decreased🎉
TD: $37.4 B; 14% Total Mortgage Portfolio
(18% lower vs. Q3)
CIBC: $42.9 B; 16% Total Mortgage Portfolio
(14% lower vs. Q3)
RBC & Scotia≈0
BMO: TBA
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Fascinating property size trends in ON & BC:
🏡Detached: Sizes increased since 1960
🏢Apt: Sizes decreased since 1990s
Other types: Limited options
Challenge?
Limited affordable options for small families:
Few large apts or small detached
Solution?
Relax zoning regulations
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Two notable monetary changes since Apr 2022:
• Rate hikes
• Quantitative Tightening (QT)
While
#BoC
stopped rate hikes and market expects up to 150 bp rate cuts in 2024, BoC might not stop QT before 2025:
This could reduce the monetary base by ∼$91B!
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How did banks' deposits soar 400% in 20 yr?
1. Expansion in 🇺🇸: 51% of 🇨🇦 banks deposit are in foreign currencies! (More details in our next post)
2. Money supply = Money Multiplier x Monetary Base
Monetary Base (
#BoC
🇨🇦 balance sheet) rose from
$42.9B in 2003
to
$319.3B in
Evolution 6 big 🇨🇦 banks deposits: 2003-2023
2003: $996B*
2013: $2.4T
2023: $5.3T
Deposits cover both domestic & international
Top performer: TD 555%⬆️ in 20 yr.
King👑: RBC has been always 1st.
Least growth: CIBC
Main reason for TD success: Expansion in 🇺🇸 by acquisition of:
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Many support home price corrections due to concerns:
1.💰High real estate returns hindering entrepreneurship
2.🏠Unfair burden on younger generations, allocating most income to housing
3.📈Unproductive property appreciations exceeding some salaries
4. 🏙️
#VanRe
&
#ToRe
make
I am curious whether Bears want the market to crash so they can buy a house or to rejoice in people’s misery?
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@WildCat_io
@tobi
@Shopify
@theJagmeetSingh
I wish he had even a month's experience managing a simple convenience store to understand how challenging it is to run, sustain, and grow a business.
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🏡Takeaways from my
@globalnews
interview:
🇨🇦 Real estate will stay sluggish & home prices won't rise next year due to
1. Delayed & slow rate cuts
2. Recession will come to 🇨🇦 before 🇺🇸
3. Expected 🇨🇦 high unemployment will pave the way for rate cuts
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"Industry expert" drops FOMO advice, but let's hear the other side:
1. Most First-time buyers priced out in ON & BC🏠
2. Rate drops? Not so fast⏰
3. Maybe recession on the horizon📉
4. Some Investors battling to keep rentals afloat even after rate
Homebuyers should jump into the market before interest rates go down, says expert
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Fixed mortgage rates are rising as 🇺🇸 & 🇨🇦 bond yields surge. Key factors:
1. Higher inflation expectations
2. Reduced bond demand due to
A. Quantitative tightening
B. Fewer buyers from China & Japan for 🇺🇸bonds
3. 🇺🇸 & 🇨🇦 govts are issuing more bonds to manage their deficits
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🇨🇦 housing issue isn't only about affordability; it's also making our economy more vulnerable to shocks.
In the last 12 years:
• Residential Mortgage Debt: +100%
• GDP Growth: +60%
Note: Canada's household debt is 103% of GDP (Q3 2023), the highest among G7 nations!
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GTA Sep 2023 Sales to New Listings Ratio (SNLR) will be ≤ 36% (Buyers' Market)
From
@rob_siglio
graph, GTA new listings will pass 16k. Assuming this month's # sales ∼Sep 2022 (5038± 15%)⇒sales # 4282 to 5794
⇒ 27% ≤ GTA SNLR ≤36%
The Lowest GTA SNLR since Jan 2009!
#ToRe
@ManyBeenRinsed
Here is the GTA for you, Woes.
Seeing about 560 per day (incl weekend and long weekend). Weekdays hovering 800-850.
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🏦Branch trends in 🇨🇦 for 6 big banks (2004-2024):
• Branch numbers peaked in 2015-16.
• Big 5 banks' branches declined from 5,177 in 2004 to 5,021 in 2024.
• As more people bank online, expect further decreases in the branch numbers.
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Provided by
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When
#RealEstate
fees contribute more to
#CDNEcon
than agriculture (1.9% vs. 1.6%)
When more than 20% of economy is related to Real Estate & manufacturing is only 10%
No surprise that
#GDP
shrank when
#housingmarket
goes down!
#TORE
#VanRE
@StephenPunwasi
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Is 35 the new 25? Let's hope not!🤞
Why worry about 35+ year mortgages?
• Easy money creates bubbles🎈
• Bubbles lead to more debt 💳
• Causing unsustainable cycle🤯
Resulting in:
1. Lifelong debt traps, reducing freedom⛓️
2. Bubbles inflate further!📈
3. Politicians might
Q1 2024 reports: Residential Mortgage Stats of Big 6 Banks+Equitable+ Desjardins
Total $1.58T in residential mortgages
(~80% of 🇨🇦 mortgages)
Remaining Amortization:
• 37.7% ($598B) >25-year
• 14.1% ($223B) > 35-year
• At least 5.9% ($94B) have negative amortization
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@Kymeleon1
Yes, leadership plays a crucial role, and since 2015, several wrong decisions have been made, including expanding the government and the recent rapid population increase of one million per year. However, it's overly optimistic to expect that the ministers under the next Prime
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@Mill_Moron
Yes! The banks' negative amortization portfolios are as follows:
CIBC: $38.1B
TD: $32.9B
BMO: $23B
Desjardins: Between zero and $6.2B (not reported)
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It is interesting to see the population growth in the same period:
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As forecasted below, GTA's SNLR hit 28.6% (deep buyer's market), the lowest since Jan. 2009. Prior to 2009, the last time reached this level was in 1996.
Toronto home prices didn't drop in Sep. as it takes time... but "Winter is Coming". 🏠❄️
#Tore
More:
GTA Sep 2023 Sales to New Listings Ratio (SNLR) will be ≤ 36% (Buyers' Market)
From
@rob_siglio
graph, GTA new listings will pass 16k. Assuming this month's # sales ∼Sep 2022 (5038± 15%)⇒sales # 4282 to 5794
⇒ 27% ≤ GTA SNLR ≤36%
The Lowest GTA SNLR since Jan 2009!
#ToRe
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#BankofCanada
rate policy is the main reason for the rapid
#homeprice
growth of last 10 yrs
#ToRe
#VanRe
Hist.
#BOC
rates:
Jan.1935: 2.25
1945: 1.25
1955: 1.75
1965: 4
1975: 8
1980: 13.75
1985: 9.4
1990: 12
1995: 8.13
2000: 4.75
2005: 2.50
2010: 0.25
2015: 0.75
2018: 1.25-1.75
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Mortgage Origination Trends in Canada
(Jan. 2013 - Nov. 2023)
Notes about 2022-23
1. Variable rate mortgage market share hit a 10-year low of 4.6% in July 2023 but now on the rise. Its share was 57.5% in Jan. 2022!
2. Market share of 3-yr & 4-yr fixed mortgages soared to 53.4%
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Comparing government debts (debt securities): Canada had the highest % increase, while Italy & the USA have higher Debt-to-GDP ratios.
Notes:
1. 🇨🇦 🇦🇺 🇮🇹 have similar GDPs
2. We only considered securities like bonds, excluding other liabilities (e.g. pensions)
#cdnecon
#cdnpoli
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@SteveSaretsky
As you noted, the impact goes beyond 0.13%, as many self-employed use their corporations for pension plans.
The actual number of people affected by the consequences of this decision (e.g. fleeing entrepreneurs), reaches into the millions!
This 0.13% is yet another fabricated
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@chef_tian97
36% of big 5 banks mortgages (and most probably all mortgages) are set for renewal within the next 2 years.
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Total annual housing starts in 🇨🇦's 6 largest cities 2000-2023:
Trend: More condos, fewer detached homes
📉 Median condo sizes:
⬇️ From 900-1000 sqft to 700-800 sqft in the last 30 years!
Implications:
👨👩👧👦 Fewer options for families with kids!
or
👶 Harder to raise kids!
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@StephenPunwasi
@Vic_Turbendian
@hmacbe
@SteveSaretsky
@vanbourse
@realTheProphet
@Charlies_Hammer
Role of immigrants in increasing GTA
#homeprices
has been exaggerated! No. of immigrants came to GTA has decreased significantly between 2011 & 2016 but in the same period
#homeprices
went up a lot!
The main factor has been Easy & Cheap borrowing!
#ToRe
…
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@DMFSBLF
We're facing a shortage of 'affordable housing.'
Many individuals desire and need to buy homes, but are unable to do so, leading them to opt for other options such as renting a room/property or staying at their parents' basements.
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@JohnPasalis
Signs that show an economy is too much dependent on real estate:
Real estate fees contribute more to
#cdnecon
than agriculture (1.9% vs. 1.6%)
More than 20% of GDP is related to real estate while manufacturing is 10%
Median home price in Canada is 40% more than US
#ToRe
#VanRe
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There is sth fishy about CND mortgage market when the avg. mortgage eligibility has increased much faster than avg. income
From 2009 to 2017 avg. new mortgage amount in Toronto has doubled, but how about avg. income in this period!?
@StephenPunwasi
@mrdruthers
@dima_nomad
#ToRe
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@MarketManiaCa
Low interest rates and easy money can create bubbles. After 2008, despite Canada's relatively stable economy not requiring aggressive cuts like the US, the
#BoC
reduced rates significantly, following the Fed cuts. Now, we're seeing bubbles across Canada. 🇨🇦💸
#cdnecon
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@GRDecter
Thanks for sharing our chart. I would greatly appreciate it if you could replace it with the complete version of the chart that features our
@WOWA_Canada
logo.
Negative amortization stats from banks' Q3 2023 reports, where mortgage payments < interest:
BMO: $32.2 B; 22% Total Mortgage Portfolio
(up from $28.4 B in Q2 2023)
TD: $45.7 B; 18%
(up from $39.6 B in Q4 2022)
CIBC: $49.8 B; 19%
(up from $44.2 B in Q2 2023)
RBC & Scotia≈0
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How small are we?
It's estimated that there are 2 trillion galaxies in the observable universe, each with avg. 100 billion stars.
That’s 250 galaxies full of 100 billion stars for each living person on Earth.
That’s 2 trillion stars for every human being that has ever existed.
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TD Q4 report (Nov. 30, 2023):
Income down 57% vs Q4 2022 since $TD allocated more than $8B for Allowance for Credit Loss. PCL is also up 42% YoY.
As a result, TD cuts ∼3% of its workforce (∼3,100) & allocated $363M for restructuring for Q4.
Q1 div. raised to $1.02 from $0.96
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I believe governments should cut their costs during deficits, not just hike taxes.
But as noted below, property taxes in
#ToRe
&
#Vanre
are among the lowest in🇨🇦. As a homeowner in Toronto, I'm more concerned about high income taxes (impacting working class) than property taxes.
In July 2023, we assessed 10,000+ 🇨🇦 properties, checking:
Effective property tax rate = property tax / fair value
Vancouver & Toronto have some of the lowest effective tax rates in 🇨🇦, standing at 0.27% & 0.36% respectively for a detached property.
More:
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2/3
Although the bank experienced growth in both interest and non-interest income vs. the last quarter, its net income declined due to an increase in provision for credit losses.
This morning, Scotia stock ($BNS) declined in response to the decrease in net income.
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@somwchi300
Again, people target the speaker rather than the message. The statement is accurate: you need people to generate wealth and socialism doesn't get it!
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Canada March 2018:
C$252B personal loans secured by homes (12% GDP)
C$32B business loans secured by homes
@BetterDwelling
USA Nov. 2017:
$448B
#HELOC
2.3% GDP
Canada vs USA: 12% GDP vs 2.3% GDP!
$252B personal loans HELOC (non-productive) makes
#cdnecon
vulnerable
#TORE
#VanRe
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The cost of owning a home in Canada is at the highest level in 28 yrs & likely to go up as rates rise. Does it have an impact on
#homeprices
? Eventually yes! Take a look at what happened 28 yrs ago
#Tore
@StephenPunwasi
@SteveSaretsky
@dbcurren
@dima_nomad
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@y3khan
Because these statistics applicable to negative amortization rather than underwater mortgages. Negative amortization is concerning for borrowers facing financial challenges, but banks primarily prioritize risk management over the issue of underwater mortgages.
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In May 2008, Toronto & Calgary had the same home prices index at $380k
Now (Nov. 2023)
#ToRe
Avg. $1,082k (0% YoY)
Index: $1,081k (0% YoY)
More:
Calgary:
Avg. home price: $540k up 10% YoY (Half of GTA's!)
Index: $572k up 10% YoY
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@oolsen50
Not true. The calculation considered a FICA taxes for a single person in 2022. Actually the effective tax rates are even lower for 2023.
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@voteLabonte
The U.S. has a significantly higher number of contractors ($694B for 19k contractors) compared to Canada ($22B for 1,800 contractors) in 2022, a fact I consider positive for supporting the private sector.
In Canada, there are 200k unionized healthcare worker. Removing them could
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