The recent developments in the Canadian housing market paint a daunting picture, especially in light of the ambitious promises made in Budget 2024. The government's pledge to construct an additional 2 million homes over the next 7 years appears increasingly improbable when examined against the current realities across various industries.Consider housing starts - Despite the government's optimistic goals, data reveals a staggering housing supply deficit in Canada. The ratio of growth in the working-age population to housing starts has widened significantly, indicating a severe shortfall in housing construction. Moreover, building permits, a leading indicator, have plummeted to their lowest levels since 1983, foreshadowing a bleak outlook for future construction.When we look to mortgages, renewal rates for fixed-rate mortgages have seen an unexpected increase in payment obligations, while there has been a notable shift towards shorter-term fixed-rate mortgages. However, the majority of homeowners possess substantial equity in their properties, signaling a sense of stability in the housing market. The government has also woken up to the amount of mortgage Fraud we are seeing in our system. The government has finally acknowledged the prevalence of it, and has proposed solutions including direct income verification from the CRA, a measure that is long overdue and essential for maintaining the integrity of the mortgage system.Credit card loans and HELOC payments are also on the rise, indicating increased financial strain among Canadians. Corporate insolvencies are climbing, and banks are reducing their own exposure to local business loans, further exacerbating economic pressures and driving down our overall GDP.Despite economic uncertainties, Canadians remain optimistic about the housing market, buoyed by prolonged stability and government promises... However, the disparity between sales volumes and population growth highlights underlying challenges in the market. Even though we have more sales this April over last April, the number of sales overall has continued to diminish compared to long term historical averages. Think 2005 when April saw over 4,000 sales (nearly 50% more than we see today) with 600,000 less people in the region.Lastly, we look at the weakening Canadian Dollar. The potential for interest rate cuts by the Bank of Canada threatens to devalue the Canadian dollar, exacerbating inflationary pressures and lowering living standards. Economic indicators suggest a fragile recovery, characterized by labor market uncertainties, a cautious Federal Reserve, an inverted yield curve, and fluctuating oil prices.While the Budget 2024's housing initiatives aim to address pressing issues, the prevailing economic landscape presents formidable obstacles to their successful implementation. From housing supply deficits to escalating debt levels and external economic factors, the road ahead is fraught with challenges that must be carefully navigated to achieve meaningful progress in the Canadian housing market. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 [email protected] Ryan Dash PREC 778.898.0089 [email protected] www.thevancouverlife.com

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“What did the council decide on item 42?” — answered with the speaker and the moment.

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