There’s a lot to dislike about X (Twitter)—if you ignore the instant news, free access, and independent journalism. But honestly, following Elon Musk makes wading through the bad-algorithm content worth it. With over 207 million followers, he’s the platform’s most followed user—and for good reason. The guy is controversial, champions free speech (even when it bites him), is leading humanity to Mars, owns the company, and is the first person ever to be worth more than $400 billion. He might actually be Tony Stark.
It’s posts like this that make me believe the Department of Government Efficiency will succeed:
We should ask Elon if he’ll complete our Eglinton LRT first…
A Not-So-Jolly Economic Rundown
On Wednesday, the Bank of Canada cut interest rates by another half-point—the second 50 bps cut in a row. Our policy rate now sits at 3.25%, down from the 5% peak we hit in July 2023. While the lower rates offer some relief, the speed of these cuts is raising eyebrows about the health of our economy:
Unemployment: Now at 6.8%—the highest it’s been in eight years—pandemic excluded. And despite a surplus of job seekers, Santa’s delivery squad (Canada Post) remains on strike.
Canadian Dollar: At a 4.5-year low and in freefall.
Food Banks: Over 2 million visits in a single month—an all-time high.
Recession: Our former BoC Governor says we’re already in one.
GDP Per Capita: Down for six straight quarters. Fun fact: Ontario, our richest province, is now poorer than the poorest U.S. state.
Thank goodness our tax collection agency is roughly the same size as our military…
Bright Spots in Real Estate
Despite the gloomy economic backdrop, the Toronto real estate market showed some resilience in November. There were 5,875 sales—a 40% jump from November 2023’s 4,194 transactions. Detached homes led the charge, making up nearly half of all sales. Unsurprisingly, the $1M–$1.25M price range saw the most activity, as this segment continues to experience year-over-year price growth, unlike other areas of the market.
With this week’s rate cut and extended amortization rules on the horizon, I anticipate the market for detached homes in this range will remain strong heading into the new year.
On the flip side, the condo market told a different story. Prices continued their downward trend, despite condos accounting for 28% of all transactions. The $500k–$599k price range was the sweet spot, especially for investors who can now rent out a downtown 1+1 bedroom for $2,500/month.
TRREB’s Chief Market Analyst, Jason Mercer, noted that high condo inventory is keeping prices under pressure. But here’s the thing: while buyers and renters are calling the shots for now, this dynamic could change quickly. If sale prices drop enough to spur demand and borrowing costs keep falling, condos could see a sharp rebound. When that happens, we might face an inventory crunch due to the challenges in building new projects:
Development Charges: Up 933% in 15 years.
High-Rise Costs: Up 75% in just five years.
Cancelled Projects: Developers can’t justify the math with current demand and costs.
It’s a recipe for potential short-term bargains, but long-term scarcity.
Geopolitical Drama
Meanwhile, Donald Trump is threatening a 25% tariff on Canadian goods unless we “clean up our border.” In response, Ontario Premier Doug Ford suggested cutting off power to 1.5 million U.S. homes.
While I can’t predict the housing market beyond an educated guess, even a casual observer knows what happens when little brothers start testing boundaries.
Signing Off for 2024
This will be my last newsletter until 2025, but I always enjoy hearing from you—whether it’s feedback, questions, or help with your real estate goals.
Wishing you a Merry Christmas, Happy Chanukah, Happy Holidays, and a Happy New Year!
Thanks for being a Holland Homes Insider. See you in the new year!