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Spring market brings deep freeze for home sales

The steep declines in home sales across Canada’s major cities reinforces our view that a downturn in residential investment will prevent the Bank of Canada from raising interest rates by as much as markets are now pricing in, particularly if – as looks increasingly likely – house prices fall later this year.
Canada Drop-In (10th May, 12:00 EDT/ 17:00 BST): We’ll be discussing the impact of monetary tightening on the economy and whether the Bank of Canada is risking a policy mistake in this special 20-minute briefing. Register now
Stephen Brown Senior Canada Economist
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Canada Economics Update

Will Canadians retire themselves into a recession?

The sharp increase in retirements this year presents downside risks to our forecasts for employment and, with GDP growth already faltering, further raises the probability that economic activity will contract.

9 August 2022

Canada Economics Weekly

Stagflation summer

The further falls in home sales and employment in July add to the evidence that the economy is losing momentum. With no sign of a material easing of inflationary pressures, however, it is too soon to expect the Bank of Canada to pivot.

5 August 2022

Canada Data Response

Labour Force Survey (July)

The second consecutive monthly fall in employment will raise a few eyebrows at the Bank of Canada but, as retirements were partly to blame, the unemployment rate remained at a record low and wage growth is strong, we doubt it will prevent a further 100 bp of policy rate hikes over the Bank’s next two meetings.

5 August 2022

More from Stephen Brown

Canada Data Response

International Trade (Mar.)

The trade surplus unexpectedly fell in March, despite the surge in commodity prices, but it is likely to rise in the second quarter, as export volumes recover while import volumes drop back.

Canada Drop-In (10th May, 12:00 EDT/ 17:00 BST): We’ll be discussing the impact of monetary tightening on the economy and whether the Bank of Canada is risking a policy mistake in this special 20-minute briefing. Register now

4 May 2022

Canada Economics Weekly

Business surveys strong, but clouds gather for housing

The CFIB Business Barometer remained very strong in April and seems to bode well for the short-term outlook, but signs of a sharp slowdown in the housing market suggest that higher interest rates may cause residential investment to fall faster than we expect. Canada Drop-In (10th May, 12:00 EDT/ 17:00 BST): We’ll be discussing the impact of monetary tightening on the economy and whether the Bank of Canada is risking a policy mistake in this special 20-minute briefing. Register now

29 April 2022

Canada Data Response

GDP by Industry (Feb.)

The jump in GDP in February means that, despite the Omicron wave, the economy was even stronger than expected in the first quarter. But signs of a sharp slowdown in the housing market in April suggest there are downside risks to second-quarter GDP growth.

29 April 2022
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