Canadian Real Estate Is Falling Off A Cliff

The Vancouver Life Real Estate Podcast

On the 'plus' side, unemployment is at an all-time, never been seen before low, at 5.2% Meanwhile, there are a whopping 862,000 job vacancies at the same time. The economy looks good, right? Well, stepping back a bit, wage growth is only at 3.4% while inflation is around 7%, making wage growth negative. Businesses are raising prices faster than salaries and the FIRE industries shed jobs at the highest rate in 4 years.
When it comes to housing, sales in Toronto are down 40% in 2 years, dropping faster than they did during the Global Financial Crisis and prices dropped 5% in April, the fastest ever for a non 'lockdown' month of April. And more rate hikes are coming...
In GRVD, active listings jumped 10% in the first 2 weeks of May, are up for the 5th month in a row, and are the highest dating back to July 2021. The Median and Average prices have dropped 9% in the past 2 weeks alone.
It appears the Bank of Canada has already taken notice as the Deputy Governor is already publicly stating that “ how high rates go will depend on how the housing market responds to rising borrowing costs.”
On top of this, there is a backlog of 1.8 million immigrants looking to obtain citizenship and move to Canada.
So while the real estate market is dropping off a cliff, the question now becomes, how big is this cliff, and how high will it bounce off the bottom?
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