Fears that the spring housing market could “overheat” will be in the background as the Bank of Canada readies for its interest rate decision on Wednesday, experts say.
The spring housing market, which kicks off in March, is typically one of the busiest times of the year for home buyers and sellers in Canada.
So far, the spring housing season is a “mixed picture,” according to RBC assistant chief economist Robert Hogue, as the Bank of Canada’s benchmark interest rate remains high and boxes out some prospective buyers.
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Average home prices are meanwhile ticking up in some regions including the GTA after a correction in the market tied to the central bank’s rate tightening cycle over the past few years.
“In some parts of the country, that recovery seems to be relatively robust,” Hogue tells Global News. “Prices are going up, but not that rapidly.”
Rishi Sondhi, economist with TD Bank, said in a housing market report released Monday that the first quarter of the year is “tracking stronger than anticipated.”
Unseasonably warm weather helped to fuel a hot start to housing activity in January and February, he noted, and some of those early sales pulled demand forward from the typically busy spring season. The Easter long weekend falling at the end of March also dampened overall sales in that month, he said.
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Like Hogue, Sondhi said he’s expecting a “modest” uptick in home sales and prices this spring, driven by pent-up demand in Ontario and British Columbia.
But both market watchers tell Global News they’re expecting many sidelined homebuyers will maintain their holding patterns until they get a clearer sign of lower borrowing costs on the way from the Bank of Canada.
Worried the housing market could ‘stoke’ inflation
The Bank of Canada, too, has made clear that its eyes are on the spring housing market as it weighs whether it’s done enough to ensure inflation will keep cooling all the way back to its two-per cent target.
While overall inflation cooled to 2.8 per cent annually in February, shelter inflation has remained a thorn in the side of the Bank of Canada, remaining above six per cent in the month. While the shelter component of the consumer price index (CPI) includes inputs like rents and mortgage interest costs tied to the central bank’s own policy rate, it also factors in home prices.
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A hot housing market could therefore “stoke shelter price inflation,” the Bank of Canada warned in March.
“If the housing sector rebounds in the spring, shelter price inflation could be pushed up, delaying the return of CPI inflation to the (two per cent) target,” the deliberations read. “If inflation proves more persistent than expected, monetary policy would likely need to remain restrictive for longer.”
But recent economic data has been largely positive for the Bank of Canada’s inflation fight.
If the Bank of Canada cuts its policy rate on Wednesday, prospective buyers would likely come off the sidelines, Hogue says. A spring cut could give Canadians and market watchers expectations that the central bank’s rate cut cycle “could be a bit more aggressive” than currently anticipated, he says, fuelling a bit more activity in the market.
Such a scenario would not align with the Bank of Canada’s goal to avoid a reacceleration in price pressures, Hogue says.
“If the housing market were to overheat again, that could be counterproductive. So (the central bank) is mindful of that.”
There’s a “coiled spring” effect in the housing market right now, Sondhi wrote in his report, which poses a risk that sales and prices could rise higher than in the current TD Bank forecast.
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Even during the Bank of Canada’s current tightening cycle, buyers have driven sales activity higher in response to cheaper borrowing rates in the market. That happened last spring when the Bank of Canada announced a “conditional pause” in its rate hike campaign and at the end of 2023, with bond yields declining and driving down fixed mortgage rates in response.
Sondhi told Global News in an interview on Monday the market is “responsive” to these developments that are positive for demand.
Rate cuts expected to skip spring housing market
But neither Hogue nor Sondhi have a rate cut from the Bank of Canada this week in their baseline housing forecasts.
Most economists are expecting the Bank of Canada will hold its policy rate steady again at 5.0 per cent on Wednesday, with calls for cuts to begin in either June or July.
Hogue says the central bank likes to signal its pivots well in advance, which would make a change in stance on Wednesday premature. But he adds that the latest economic data could allow the Bank of Canada to be a bit clearer that “an inflection point is imminent in its monetary policy.”
In addition to the dampening effect of higher interest rates, Sondhi said the lack of certainty from the Bank of Canada about where interest rates are heading is another factor constraining buyers. He agreed that this week could see the central bank provide clearer signals about a possible rate cut timeline, something monetary policymakers have so far been tight-lipped about.
“The economic conditions that we see are supportive of cuts so they might open the door for that possibility in their April statement,” he told Global News.
But Hogue also warns not to expect a clear direction from the Bank of Canada one way or another. Monetary policymakers will want to “keep some options open” should inflation progress stall, or if the housing market trends hotter than economists are currently forecasting, he says.
“If the market does not behave the way we expect and starts to jump up very quickly and overheat, it could make the Bank of Canada take a step back and reassess its game plan,” Hogue says.
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TD Bank is expecting the housing market to pick up in the second half of the year after interest rate cuts begin in July. Sales and prices are primed to increase, according to the forecast, but in many markets — particularly those most constrained by affordability — price appreciation will be limited.
Even when interest rate cuts begin, Sondhi said he doesn’t expect housing to become meaningfully more affordable over the coming years as cheaper borrowing costs fuel rising prices, offsetting improvements in affordability.
For Hogue’s part, he says it won’t be until late 2024 and into 2025 that more buyers come off the sidelines, empowered by interest rate drops of one to two percentage points over the next few years.
“A drop in interest rates will help affordability and will bring more people, more buyers into the housing market,” Hogue says.
“But we will need a string of cuts before it makes a real difference to a lot of people.”
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
MIAMI GARDENS, Fla. (AP) — Miami Dolphins quarterback Tua Tagovailoa sustained a concussion for the third time in his NFL career, leaving his team’s game Thursday night against Buffalo after running into defensive back Damar Hamlin and hitting the back of his head against the turf.
Tagovailoa remained down for about two minutes before getting to his feet and walking to the sideline after the play in the third quarter. He made his way to the tunnel not long afterward, looking into the stands before smiling and departing toward the locker room.
The Dolphins needed almost no time before announcing it was a concussion. The team said he had two during the 2022 season, and Tagovailoa was diagnosed with another concussion when he was a college player at Alabama.
Dolphins coach Mike McDaniel said Tagovailoa would get “proper procedural evaluation” and “appropriate care” on Friday.
“The furthest thing from my mind is, ‘What is the timeline?’ We just need to evaluate and just worry about my teammate, like the rest of the guys are,” McDaniel said. “We’ll get more information tomorrow and take it day by day from here.”
Some players saw Tagovailoa in the locker room after the game and said they were encouraged. Tagovailoa spoke with some players and then went home after the game, McDaniel said.
“I have a lot of love for Tua, built a great relationship with him,” said quarterback Skylar Thompson, who replaced Tagovailoa after the injury. “You care about the person more than the player and everybody in the organization would say the same thing. Just really praying for Tua and hopefully everything will come out all right.”
Tagovailoa signed a four-year, $212 million extension before this season — a deal that makes him one of the highest-paid players in the NFL — and was the NFL’s leading passer in Week 1 this season. Tagovailoa left with the Dolphins trailing 31-10, and that was the final score.
“If you know Tua outside of football, you can’t help but feel for him,” Bills quarterback Josh Allen said on Amazon following the game. “He’s a great football player but he’s an even greater human being. He’s one of the best humans on the planet. I’ve got a lot of love for him and I’m just praying for him and his family, hoping everything’s OK. But it’s tough, man. This game of football that we play, it’s got its highs and it’s got its lows — and this is one of the lows.”
Tagovailoa’s college years and first three NFL seasons were marred by injury, though he positioned himself for a big pay bump with an injury-free and productive 2023 as he led the Dolphins into the playoffs. He threw for 29 touchdowns and a league-best 4,624 yards last year.
When, or if, he can come back this season is anyone’s guess. Tagovailoa said in April 2023 that the concussions he had in the 2022 season left him contemplating his playing future. “I think I considered it for a time,” he said then, when asked if he considered stepping away from the game to protect himself.
McDaniel said it’s not his place to say if Tagovailoa should return to football. “He’ll be evaluated and we’ll have conversations and progress as appropriate,” McDaniel said.
Tagovailoa was hurt Thursday on a fourth-down keeper with about 4:30 left in the third. He went straight ahead into Hamlin and did not slide, leading with his right shoulder instead.
Hamlin was the player who suffered a cardiac arrest after making a tackle during a Monday night game in January 2023 at Cincinnati, causing the NFL to suspend a pivotal game that quickly lost significance in the aftermath of a scary scene that unfolded in front of a national television audience.
Tagovailoa wound up on his back, both his hands in the air and Bills players immediately pointed at him as if to suggest there was an injury. Dolphins center Aaron Brewer quickly did the same, waving to the sideline.
Tagovailoa appeared to be making a fist with his right hand as he lay on the ground. It was movement consistent with something that is referred to as the “fencing response,” which can be common after a traumatic brain injury.
Tagovailoa eventually got to his feet. McDaniel grabbed the side of his quarterback’s head and gave him a kiss on the cheek as Tagovailoa departed. Thompson came into the game to take Tagovailoa’s spot.
“I love Tua on and off the football field,” Bills edge Von Miller said. “I’m a huge fan of him. I can empathize and sympathize with him because I’ve been there. I wish him the best.”
Tagovailoa’s history with concussions — and how he has since worked to avoid them — is a huge part of the story of his career, and now comes to the forefront once again.
He had at least two concussions during the 2022 season. He was hurt in a Week 3 game against Buffalo and cleared concussion protocol, though he appeared disoriented on that play but returned to the game.
The NFL later changed its concussion protocol to mandate that if a player shows possible concussion symptoms — including a lack of balance or stability — he must sit out the rest of the game.
Less than a week later, in a Thursday night game at Cincinnati, Tagovailoa was concussed on a scary hit that briefly knocked him unconscious and led to him being taken off the field on a stretcher.
His second known concussion of that season came in a December game against Green Bay, and he didn’t play for the rest of the 2022 season. After that, Tagovailoa began studying ways where he may be able to fall more safely and protect himself against further injury — including studying jiu-jitsu.
“I’m not worried about anything that’s out of my hands,” McDaniel said. “I’m just worried about the human being.”
TORSBY, Sweden (AP) — David Beckham and former England coach Roy Hodgson were among the soccer dignitaries who attended the funeral of Sven-Goran Eriksson on Friday in the Swedish manager’s small hometown of Torsby.
Eriksson’s wooden coffin was covered in white flowers and surrounded by six tall candles and other floral wreaths as the ceremony began inside the 600-seat Fryksande church.
“It is a day of grief but also a day of thankfulness,” the priest, Ingela Älvskog, told those in attendance.
Beckham, who arrived by private jet on Thursday, greeted Eriksson’s 95-year-old father Sven and other family members with hugs inside the church before the funeral started.
Eriksson became England’s first foreign-born coach when he led the national team from 2001-06, and made Beckham his captain.
Eriksson, who also won trophies at club level in Italy, Portugal and Sweden, died on Aug. 26 at the age of 76, eight months after he revealed he had been diagnosed with pancreatic cancer and had at most one year to live.
Some 200 seats in the neo-Gothic church from 1898 were reserved for his family, friends and players from his career in the football world, according to his agent. The remaining seats were open for the public, according to Eriksson’s wish, with a big screen set up outside the church where hundreds more gathered to watch the ceremony. The funeral was also broadcast live on some Swedish media websites.
The wooden coffin was wheeled in by pallbearers at the church Friday morning as fog wrapped Torsby — a town of about 4,000 people located about 310 kilometers (193 miles) west of Stockholm. Next to the casket was a photo of Eriksson on a small table. The floral wreaths included ones sent by FIFA and Lazio, the Italian team that Eriksson led to the Serie A title in 2000.
The ceremony began with somber piano and organ music, but later took on a more upbeat note with Swedish singer Charlotta Birgersson performing Elton John’s song “Candle In The Wind” and then “My Way” in a duet with Johan Birgersson, who later intoned the popular Italian song “Volare” after the family had gathered around the casket to lay flowers.
Beckham also visited Eriksson in Sweden in June to say goodbye. Others attending the funeral included the Swedish coach’s longtime partner Nancy Dell’Olio. Eriksson’s agent had said that guests from England, Italy and Spain were expected.
After the funeral, the casket was carried out of the church by eight men to the hearse. The guests then walked in a procession accompanying the coffin to a nearby museum where speeches and eulogies to the coach fondly known as “Svennis” were planned on an outdoor stage. A brass band played during the procession through Torsby, including the tune “You never walk alone” from the musical “Carousel” which has become the anthem of Liverpool, the club Eriksson supported since childhood.
The local soccer club Torsby IF, where Eriksson started his career in the 1960s, wrote on its webpage that “you also showed your greatness by always being yourself, the caring Svennis who talked to everyone and took the time, for big and small, asking how things were and how the football was going. We will miss you.”
