🇨🇦 Canada’s Housing Struggles

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👋 Friends, Rallie here. The newsletter coming in hot to give you the latest in crypto, finance, and tech.

On the menu:

• 🇨🇦 Canada’s Housing Struggles

• 🗞️ Headlines That Hit

• 📈 Refresh: Value Trap

• ✌️ Trivia Thursday

• 💯 Top Tweets

The Rallie Recap

🏠 With many calling for an overhaul of Canada’s housing system, how will the nation respond?

• Canada saw huge slowdowns in the annual pace of housing starts, ranging from 10-33%, so what does this mean?

• 🏗️ The amount of new residential housing units (aka ‘housing starts’) being constructed is decreasing at a concerning rate. And the crunch is getting worse as the nation struggles to house the rapidly growing population. 📈

• 🤑 Although there are thousands of places to rent, many citizens struggle to find permanent housing within their price range.

• The imbalance of supply and demand in the housing market has many wary of short-term rentals taking up the total housing stock. 🤔

• But others disagree. ✋ By 2030, a coalition of housing experts, advocates and businesses claims Canada needs to build 5.8M new homes — including 2M rental units to face housing affordability.

• 📢 It calls on the prime minister to reduce taxation and create cheap financing to encourage home builders to take on new projects.

• Despite the federal government’s current plan, $82B in funding for national housing, 😐 several housing researchers argue the plan over-emphasizes building condominiums and home ownership that many can’t even afford.💰

• ✈️ Meanwhile, Canada is experiencing (and the government is pulling for) record levels of immigration. But, one in five builders are cancelling entire projects because of rising interest rates and the housing environment. 👷‍♂️

• The question looms, where will everyone live?

• Most citizens are pessimistic and outraged by the situation. 😡

• Still, the government argues “Canada needs high immigration to support the economy and build the homes it desperately needs.” 🛬

• 🏘️ A TD report disagrees, warning that “continuing with a high-growth immigration strategy could widen the housing shortfall by about a half-million units within just two years.” 🤧

• Will Canada’s new Minister of Housing and Infrastructure manage expectations?☝️Sean Fraser warns that restoring the housing market’s affordability where a job is enough to afford a home “might take a bit of time,” with no easy fix in sight. 🗓️

• As the Liberal party is falling behind in polls, will effective change to the affordability, availability and development of housing occur?

• The power of social security systems. 🤝 Some have argued that part of the solution is to double the proportion of social, non-profit and community housing to take Canada to the OECD average to notably extend affordability to citizens. 🛟

• 🚨 Additionally, some experts warn that “if we don’t introduce innovative fiscal measures to revive the for-profit, purpose-built rental market and incentivize capital investments, the reality is, we won’t see construction pick up.” 🚧

• 🧐 Will meaningful change occur in Canada’s housing market with different groups banding together to fight alongside the federal government? Time will tell.

Headlines That Hit

• 🇦🇷 Peso confidence plunges. Argentina’s peso slid to 780 pesos per dollar after an unsettling election result that could lead to a radical libertarian economist becoming president.

• 🪡 Threads coming loose? The daily active user count for the social media platform has fallen by 79% after one month of launching.

• 🤨 Musk + Trump. Elon Musk accused of trying to “cozy up” to Trump by federal judge during criminal probe.

• 🇨🇳 Number denial. China will stop releasing youth unemployment statistics this month after citizens ages 16-24 are reaching record levels of joblessness.

Rallie Refresh: Value Trap

Is it a bargain or will the dip in prices keeping dipping? How does a value trap get investors every day?

🔖 What is a value trap?

• A value trap is any form of investment, such as a stock, that seems cheaply priced “because it has been trading at low valuation metrics” for a decent amount of time. 🏷

• It can seem like a good deal when you compare historical data, competition or the raw stock data; however, the danger lies in the stock being idle at its current price, or dropping even more after an investor buys into the company. 📉

👀 Here are some signs of a value trap…

1. Profit inconsistencies 📊

2. Cost management struggles 💸

3. Bad management and poor planning 😵‍💫

Although they seem easy to identify, it can be easy to forget about value traps because of the potential money you could gain. 🤩 Even for short-term investments, look at the long-term data, universal context and be sure to always DYOR. 🤓

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✌️Trivia Thursday✌️

💵 The answer for Tuesday’s newsletter (Which currency is the world’s reserve currency?) is USD! Find out today’s answer on next week!

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DISCLAIMER: This is not financial or legal advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.