The Weekly 411:

Today we're covering

💲 Canadian Dollar Could Drop to 69 Cents Amidst Rate Cuts

😲 More Canadians Rent Than Ever Before

👋 Half of BC's Young Adults are Considering Leaving the Province

🏦 Mortgage Delinquency in Canada Exceeds $1 Billion

🤔 Our 'WTF' of The Week

Read Time: 3 minutes

💲 Canadian Dollar Could Drop to 69 Cents Amidst Rate Cuts

• The Bank of Canada is expected to cut interest again in July, and then pause before cutting again by the end of the year. 

• This would put the Bank of Canada at three cuts for the year, while the Federal Reserve is only expected to cut once.

• Economists predict the Canadian dollar can fall to $0.69 USD (currently $0.74) as the gap in interest rates widens.

• A 100 basis point difference in interest rates between the two countries has historically been the "comfort zone"

Why it Matters: The Canadian economy is showing positive signs, with month-over-month inflation decreasing in recent months. However, rent inflation is at its highest level since the 1980s, indicating underlying economic pressures. A wider gap could lead to a decline in the Canadian dollar, making imports more expensive and fueling inflation.

😲 More Canadians Rent Than Ever Before

• The number of renter households in Canada has increased by 21.5% since 2016.

• Single-person households make up the largest share of renters (44.1%), followed by couples with children (24.5%).

• The cities with the highest shares of renters are:

  • Toronto (47.5%)

  • Vancouver (46.8%)

  • Montreal (41.1%)

• Rent prices rose 5.4% annually, the fastest growth rate in over two years.

• The vacancy rate fell to 1.9%, the lowest level in over a decade.

👋 Half of BC's Young Adults are Considering Leaving the Province

• According to a recent Angus Reid Institute survey, 1/3 British Columbians are considering leaving due to high housing costs.

• Half of 18-34 year olds and over 40% of 35-54 year olds are considering leaving.

• Older residents (55+) are less likely to leave, with 40% strongly opposed.

• 42% of Lower Mainland and 41% of Interior residents are more likely to consider leaving than those in Metro Vancouver or Vancouver Island/North Coast.

• B.C. experienced negative net interprovincial migration in 2023, the first time in over a decade.

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🏦 Mortgage Delinquency in Canada Exceeds $1 Billion

• 34,000 consumers missed a mortgage payment in Q1, a 23% increase from last year.

• Delinquency rates spiked in Toronto and Vancouver.

• 9% of mortgages renewing in Q1 saw monthly payments increase by over $500.

• The Canada Mortgage and Housing Corporation (CMHC) defines severe delinquency as mortgages that are 90 days or more past due.

🤔 WTF of The Week:

FYI: High housing demand isn't limited to just buying. Increased demand for rentals also drives up prices. As more people seek rental properties, investors are drawn to this market, competing with potential homeowners for the same properties. This bidding war inevitably pushes prices upwards for both buyers and renters.