SUMMARY: Benjamin Tal's MREB AGM Presentation (November 2022)
Suzan highlights AGM presentation with Benjamin Tal on mortgage rates, employment trends and immigration. Knowledge creates opportunities!
About our Economy
It's not about inflation, its about the cost of buying inflation down.
80% of inflation expectations are around these commodities: milk, bread, beer, and wine.
Inflation is a global story.
50% of inflation has shifted from demand to supply and supply inflation has started to soften. Good news!
We are almost in a global recession, and so far it is deemed to be mild. Good news!
Commodity prices are showing signs of levelling. Good news!
The key to reducing inflation lies in the labour market.
The Canadian Labour Market
Companies will struggle to be profitable due to an increased level of illness in the workforce, negative affecting productivity.
It is difficult to find employees for minimum wage and lower income sector jobs.
70% of Canadian immigration in the last 12 months was international students on visas. The Canadian Government has offered those students to remain in Canada and apply for higher income sector jobs. This represented 450,000 jobs in the last 12 months. The propensity of this group to buy a home is double the average individual. Great news!
COVID opened up the "Ivy League" of the labour market where highly educated people did not have to accept lower income jobs and in fact were able to secure virtual positions. This group's propensity to buy homes is also double that of the average individual. Great news!
The Bank of Canada would rather see recession than inflation, so interest rates will continue to increase, but they must be careful not to overshoot.
Rates will likely climb to 4.25% or 4.5% by the Spring, at which time we could see inflation stabilize. Great news!
The BoC will not decrease interest rates until they are sure that inflation is negligible, i.e. 2% or lower. Current predictions are rate reductions, if any, would happen in 2024.
We have a massive undersupply in housing, with a combined immigration prediction of 700-800k over 2022 and 2023.
So what does this mean for me?
Talk to your clients about the opportunity to buy in the current rate environment and connect with our Strategic Partners to talk about financing solutions.
Attend the GTA Condo Outlook on November 24th to hear the predictions around new home construction. 1/3 of new projects are delayed, so this Outlook will be super valuable in your conversations with your clients.
Bringing all this info into content for social media, e-blasts, and face-to-face meetings will establish you as current and competent in a shifting market, and will help you generate leads and convert them as well.