Market Update: October 2023

As we step into the vibrant month of October, we are thrilled to share a comprehensive overview of the Canadian Rental Market and that are shaping Canada's economic landscape.  

Rental Inflation: In Canada, rental prices are going up at their fastest pace in the last 30 years. This is causing inflation to rise by 0.4 percentage points, making the cost of living increase for many Canadians.

Construction Investment has Slowed: Investment in housing, including building new homes and making renovations, has decreased to levels similar to what we saw during the peak of the COVID-19 pandemic. This drop raises concerns about potential housing shortages in the near future, which could impact both renters and homeowners.

A Diverse Market: While the national housing market seems balanced with a sales-to-listings ratio of 56%, it's important to recognize that different regions of Canada have very different dynamics. For example, Ontario is currently a buyer's market with a ratio of 46%, whereas Alberta is experiencing a stronger seller's market at 73%. These variations highlight the need to consider regional differences when thinking about real estate investments.

 Higher Interest Rates: Interest rates in Canada are on the rise, and this has led to an increase in the household debt service ratio, which measures the percentage of total income used for loan payments. Canada's ratio is now one of the highest globally. This underscores the importance of managing your debt wisely in a time of increasing borrowing costs.

Balancing Debt and Wealth: While there's been much talk about high household debt levels in Canada, it's crucial to remember that many Canadians also possess substantial assets, such as real estate and investments. These assets can provide a financial cushion in uncertain times. It's essential to consider your overall financial situation when assessing your financial health.