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The Worst is Over, an optimistic 2024?

Research Weekly Insights The Worst is Over Hero
Let me be the bearer of good news for once: the Bank of Canada did NOT raise interest rates today. No more hikes were expected, because we’re clearly starting to see the cracks in the economy. Unemployment is rising, house prices are dropping, GDP is down, and bigger layoffs are happening (TD announced 3,000 job cuts recently). I’ve never been one to cheer for a recession, and I don’t think recessions are positive for commercial real estate. We may love office leasing and warehouse development, but let’s admit that real estate becomes an expense to minimize during hard times.

But to the title: is the worst over? Plenty of high-profile commentators think so. As I mentioned last week, economists at the Real Estate Forums were optimistic about rates cuts in 2024... but then again, they said that last year, didn’t they?

What concerns me is the chart below. The US seems to have weathered the storm of high rates and continued growing. Canada is performing much worse. You can come up with many reasons for this, including that our economy is more dependent on real estate and debt. But our economy is shrinking, while having lower rates than the US... not an encouraging combination. 

Research Weekly Insights The Worst is Over Graph

Summary
As widely expected, the Bank of Canada held interest rates unchanged in the face of rising unemployment and shrinking GDP. 


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Pour plus d’informations, veuillez contacter:

Adam Jacobs

Head of Research | Canada

Toronto Downtown

Colliers Canada's head of research, leading a cross-country team of 20 mapping, analytics and research professionals. Formerly head of Canada research at Cushman Wakefield and Director of Analytics at Oxford Properties. Featured in mainstream publications such as the Toronto Star, industry publications and podcasts. Specializing in the big picture and the fundamentals driving real estate - demographics, the macro environment and the global economy. 

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