The financial news this morning was dominated by the December employment reports for Canada and the US.

In Canada we saw one of the worst months for job creation in the last two decades as Canada lost 45,900 jobs (see chart above), which is stunning considering the expectation was for a gain of 14,000.  This pushed the Canadian unemployment rate from 6.9% up to 7.2%, and pushed the Canadian dollar to 4-year lows.

Job growth is arguably the most important requirement for gains in real estate prices.  In BC, we may be in luck in that the province actually created 13,000 net new jobs.  However, Ontario saw 39,300 net job losses, a staggering total compared to the population of the province.  Also, we have to remember that the Toronto housing market has continued to defy fundamentals and has grown while the Vancouver housing market has been relatively flat for a while now.  It would be hard not to believe that the risks of real-estate speculation in Toronto has reached new heights since the job situation is clearly worse than anyone had anticipated.

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