{"id":11558,"date":"2019-02-02T10:10:01","date_gmt":"2019-02-02T18:10:01","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=11558"},"modified":"2019-01-26T12:31:06","modified_gmt":"2019-01-26T20:31:06","slug":"what-matters-to-the-canadian-housing-market-fundamentals","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/02\/what-matters-to-the-canadian-housing-market-fundamentals\/","title":{"rendered":"What Matters to The Canadian Housing Market Fundamentals?"},"content":{"rendered":"<p style=\"text-align: justify;\">The Canadian housing market\u2019s performance has been even worse than TD expected, but there are multiple reasons one of Canada\u2019s biggest banks doesn\u2019t predict \u201ca further sustained deterioration\u201d \u2014 or worse \u2014 this year.<\/p>\n<p style=\"text-align: justify;\">\u201cThese [reasons] include another year of strong population growth, healthy labour market conditions and a more patient Bank of Canada,\u201d writes Rishi Sondhi, a TD economist, in a report titled \u201cThe Winter of Discontent.\u201d<\/p>\n<p style=\"text-align: justify;\">TD goes on to chart four of the trends it expects to insulate the Canadian housing market from a worse year than 2018, which saw the biggest price drop since 1995.<\/p>\n<p style=\"text-align: justify;\"><strong>Immigration drives a housing fundamental : population growth<\/strong><\/p>\n<p style=\"text-align: justify;\">What\u2019s going on here : Federal Immigration levels dating back to 2013, including a forecast for this year\u2019s total.<\/p>\n<p style=\"text-align: justify;\">The takeaway : A growing population supports demand for new homes, and TD notes that the Canadian government\u2019s immigration target for 2019 is 331,000, up from 330,000 last year. \u201cMoreover, a significant portion of Canadian residents are in their household formation years, providing a solid foundation for demand,\u201d writes Sondhi.<\/p>\n<p style=\"text-align: justify;\"><strong>Canadian labour market to post \u201chealthy\u201d gains in 2019<\/strong><\/p>\n<p style=\"text-align: justify;\">What\u2019s going on here : Annual employment growth presented as a percentage.<\/p>\n<p style=\"text-align: justify;\">The takeaway : \u201cOur forecast calls for over 150k jobs being added in 2019 while unemployment remains low. This should keep household incomes growing at a reasonable pace,\u201d says Sondhi.<\/p>\n<p style=\"text-align: justify;\"><strong>Toronto and BC are soft, but not all surrounding local markets are equal<\/strong><\/p>\n<p style=\"text-align: justify;\">What\u2019s going on here : TD shows the sales-to-new listings ratio, which is an indicator of market strength, for Toronto and Vancouver, as well as the respective provinces they are in (minus those markets).<\/p>\n<p style=\"text-align: justify;\">The takeaway : Ratios above 60 percent indicate conditions that favour sellers, and clearly a number of markets in Ontario are holding their own. \u201cOutside of Toronto and Vancouver, an important (and perhaps overlooked) point is that markets in Ontario and B.C. are holding up much better,\u201d Sondhi explains.<\/p>\n<p style=\"text-align: justify;\"><strong>Five-year bond yields are trending lower, and that matters<\/strong><\/p>\n<p style=\"text-align: justify;\">What\u2019s going on here : The yield on five-year bonds has been generally declining since late last year.<\/p>\n<p style=\"text-align: justify;\">The takeaway : While the central bank\u2019s policy rate tends to influence variable mortgages, the five-year bond yield has pull on five-year fixed-rate mortgages, the most popular option for Canadian borrowers. \u201cBond yields have moved significantly lower since November, which should feed through into lower mortgage rates.\u201d Fixed-rate mortgages are more influenced by their corresponding government bond yields, as banks fund mortgages with bonds.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.livabl.com\/2019\/01\/canadas-housing-market-disaster.html\">4 Key Trends That Are Helping The Canadian Housing Market Avoid Disaster<\/a> by Josh Sherman | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Canadian housing market\u2019s performance has been even worse than TD expected, but there are multiple reasons one of Canada\u2019s biggest banks doesn\u2019t predict \u201ca further sustained deterioration\u201d \u2014 or &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/02\/what-matters-to-the-canadian-housing-market-fundamentals\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-11558","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What Matters to The Canadian Housing Market Fundamentals? 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