White Hot North: Residential Real Estate Investment in Canada
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White Hot North: Residential Real Estate Investment in Canada

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residential real estate investment

The Briefing

  • Residential investment made up 9.3% of Canada’s GDP as of Q4’2020
  • For context, U.S. residential real estate investment peaked in 2006 at 6.7% of the country’s GDP (just before the infamous housing crash) and it currently sits at 4.3%

White Hot North: Residential Real Estate Investment in Canada

Residential real estate is breaking records in Canada. As of Q4’2020, it accounted for 9.3% of the country’s GDP.

The purchase, sale, and construction of new homes in Canada currently makes up more of the country’s economy than it does in any other developed country.

There’s No Place Like Home

So why is there so much investment going into building residential structures? Here’s a look at just a few reasons:

  • Increased immigration to Canada
  • Falling mortgage rates
  • Increased saving rates

The steady flow of immigration into Canada is a significant factor behind increased residential real estate investment. Prior to the pandemic, the country welcomed around 300,000 newcomers per year—increasing the demand for housing, particularly in urban hubs like Toronto and Vancouver.

Mortgage rates have also been steadily falling, making it easier to purchase a home. As of the latest 2020 data Canadian 5-year uninsured mortgage rates sat at 2.1%, compared to a steep peak in the beginning of 2019 at 3.7%.

Additionally, some individuals may have become more capable of affording a new home as increased saving rates have become a widespread trend during the pandemic, potentially adding to demand. This combined with increasingly flexible remote work options are increasing real estate activity around the country.

Higher Stress Tests

The increased demand has caused prices to skyrocket. As it stands now, if the housing bubble doesn’t burst, prices will continue to rise, and could become a major wedge separating those who can afford the increasing prices and those who cannot.

Two major Canadian cities—Vancouver and Toronto—are already among the least affordable cities in the world due to low vacancy rates and the immense demand.

According to CBC, the country’s top banking regulator is making a proposal to raise the mortgage stress test level. The idea is to raise it to 5.25% or 2 percentage points above the market rate, whichever is higher. This would be up from the current rate of 4.79% posted rate at Canada’s biggest lenders.

Borrowers will have to prove their ability to take out a loan at the higher rate, regardless of the lender’s ability to provide the loan at a lower one, in order to relieve some of the pressure on housing prices.

Where does this data come from?

Source: Stats Can, Better Dwelling
Notes: The definition of what constitutes residential construction includes major renovations, construction, and ownership transfer fees.

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Charted: The Ukraine War Civilian Death Toll

Using data from the UN, this chart shows civilian death toll figures resulting from Russia’s invasion of Ukraine.

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Ukraine war death toll

The Briefing

  • In total, since the war began in February there have been over 7,031 Ukrainian civilian deaths
  • Most of the civilian casualties recorded were caused by the use of explosive weapons, such as missiles and heavy artillery

Charted: The Ukraine War Civilian Death Toll

Russia’s war of aggression in Ukraine has wrought suffering and death on a mass scale, with many Russian attacks targeted at civilians.

We’ve created this visual using data from the UN Office of the High Commissioner for Human Rights (OHCHR) to better understand how many civilians have died in Ukraine as a result of the war, as well as how many were injured and how many were children.

The Numbers

As of early December, it is reported that 7,031 people in Ukraine have died because of the war — 433 of them children. Another 11,327 have been injured, 827 of which are children. In total, this is over 18,000 people killed or injured.

The figures are difficult to verify due to differing reports coming out of both Russia and Ukraine. The UN OHCHR anticipates that the numbers could be even higher.

The State of the Conflict

The war began on February 24th, 2022 and less than a year in, millions of people have been displaced by the conflict, and thousands of civilians have been injured or killed.

According to the UN, most of the civilian deaths have been caused by wide-ranging explosives such as heavy artillery shelling, missiles, and air strikes, and have been concentrated in Donetsk and Luhansk and in other territory still held by Ukraine.

Additionally, new estimates from Kyiv report approximately 13,000 Ukrainian military or soldier deaths, which has yet to be confirmed by the army.

Where does this data come from?

Source: The United Nations Office of the High Commissioner for Human Rights monthly reports on civilian deaths in Ukraine.

Note: Data on deaths and injuries can vary wildly depending on the source.

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