Interest Rates Hiked Again, Mass Immigration To The Rescue

5 thoughts on “Interest Rates Hiked Again, Mass Immigration To The Rescue”

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   This weeks podcast has us exploring the new rate hike thanks to the BoC’s continued quantitative easing. While it’s been difficult for many seeing rates up 400 basis points in 9 months – that’s an eye watering 1,600% since the start of the rate hike cycle – and it has all but erased the credibility of the Bank of Canada who waited until inflation was at 6.7% before acting and indicated rates would be low until 2023. We explore the new debt levels faced by Canadians who have a whopping debt to GDP ratio of 117% or $75,000 per capita. These are the kinds of debt levels that will take a generation to pay off.

   As we look for solutions the only apparent saviour is immigration. Immigration has exploded this year as we hit 700,000 new immigrants in 2022 and 23% Canada’s population (or 8.3 million people) were either permanent residents or immigrants before becoming citizens. Furthermore, immigrants now account for most of Canada’s labour force and by 2032 most of Canada’s increasing population base will be entirely new immigrants. As we close out 2022 and look towards more aggressive immigration targets in the years ahead, places like Quebec are reducing the amount of new immigrants (they will only take 10% as they intend to preserve their French Canadian heritage). This will eventually put more and more housing pressure on other metro’s like Toronto & Vancouver in the years to come.

   Comparison as they say is the thief of joy – unless you’re a Vancouverite comparing the housing market to our fellow Torontonians. Inventory levels are up 160% in some Toronto suburbs and while 2021 saw 12,000 pre-sale units sell, 2022 will end the year with about 3,000 pre-sales sold!! That's a jaw dropping fall off in sales volume. Furthermore prices have fallen beyond 20% in Toronto while Vancouver sits around 12-13% and inventory remains incredibly tight. For two major metros that often move in unison, we are starting to see the divergence of the marketplaces with Vancouver showing off its resilience in a difficult market.

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3. Hi Dan, I am watching your videos – good stuff! I was watching your video from 3 weeks ago with Taylor Steele where you made a comment about investing in Calgary with 250K in multi family. I just have one question. I have invested in Calgary for past 15 years. I owned many houses here and I am familiar with the market. Where do you get a four plex in Calgary for 250K ???? Let me know, I will go buy four to them !
   Cheapest one in Forest lawn is 540K and you better be a Bruce Lee or John Wick to manage those tenants ! Those cheaper properties are in really rough parts of cow town. I would not advise beginner investor to sink money there unless they have a lot of experience and they know what they are doing.

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4. Canada is growing ourselves into poverty.

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5. Immigrant lands in Ontario, becomes Canadian.. moves to Quebec. Quebec is dreaming if they think they can limit the immigrants. USA has less immigrants per capita because it's harder to get into the US. Such a high level of immigrants has an impact on the quality of life for Canadians. They will create wage stagnation and a very high cost of living!

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