Buying a home remains out of reach for many families struggling to break into Canada’s booming housing market as home prices continue to soar alongside inflation and a higher cost of borrowing.
Among frustrated prospective buyers is Mac Ross, an assistant professor at Western University’s School of Kinesiology in London, Ont. He tells Global News that he’s struggling to find a home big enough for his growing family, even on a professor’s salary.
The family of four has been renting a two-bedroom home for the past few years, but the addition of a new baby pushed Ross and his wife to put together a down payment in search of a three-bedroom home five months ago.
Though he says they’ve found a couple of bungalows listed for just under $500,000 that fit their budget and would accommodate the family, the properties were scooped up for more than $200,000 above asking.
“At that point, there’s nothing we can do. It just kind of boggles the mind that people were willing to pay that much,” he says.
The family has adopted a holding pattern in their house hunt now, and is waiting to see if the spring brings any calmer conditions. Rent is stable at their current home and Ross says they’ve been able to absorb the hit from rising prices and interest rates, though their buying budget is maxed out.
They can’t wait forever, though, as the baby is quickly growing to need a bedroom of her own, putting the pressure on to make their current space work or rent a more expensive home that will quickly burn through their downpayment savings.
“This was like our last chance, it was all we could possibly get. It’s just impossible,” Ross says. “We won’t be able to get a home, I don’t know, until the bubble goes or something.”
4:46 Canadian home prices soar to new heights, averaging $800K
Canadian home prices soar to new heights, averaging $800K
Housing affordability eroding
The Ross family is not alone in their dim outlook on the Canadian housing market.
A recent report from Mortgage Professionals Canada (MPC) showed 29 per cent of respondents felt now was a good time to buy a home in their community — the lowest that figure has hit in the 12 years of the survey.
MPC’s survey captured impressions from more than 2,000 people, the vast majority of whom were already homeowners, however. The market outlook is even worse among the roughly one in five respondents who don’t own property: only three per cent said now was a good time to buy a home.
A slew of factors are coming together now to put homes out of reach.
Inflation levels, meanwhile, are at a more than 30-year high, Statistics Canada said Wednesday, putting particular pressure on consumers at the gas pump and the grocery store.
2:10 Economists say inflation hit 5.7% in February, but hasn’t peaked yet
Economists say inflation hit 5.7% in February, but hasn’t peaked yet
The Bank of Canada began increasing its key interest rate target at the start of this month, a move that looks to tamp down surging inflation and calm the housing market but simultaneously raises the cost of borrowing and reduces house hunters’ buying power.
Though wages are also generally growing in Canada’s tight labour market, Kyle Dahms, economist with National Bank of Canada, says home price growth is “outpacing” compensation for most Canadians.
Though the first quarter of 2022 has yet to wrap, Dahms says rising interest rates, alongside other factors hitting Canadian pocketbooks, will not help prospective buyers like Ross.
“That’s going to be somewhat biting for homebuyers,” Dahms says.
He adds that the spring market, typically a busy time in Canadian real estate, could see some relief with additional listings coming to market as owners look to “offload” properties to minimize mortgage payments or maximize returns.
A National Bank report from Tuesday showed new listings surged 23 per cent in February, though total inventory remains low at only 1.6 month’s supply.
It’s too soon to say whether the growing stock will become a sustained trend, Dahms says, but a surge of new listings could ease competition and provide an entry point into the market for prospective buyers.
“If it does that, (the market) could open up.”
House hunters changing tactics
Some real estate watchers are already seeing a change on the horizon of Canada’s real estate market in response to rising interest rates.
Toronto realtor Pritesh Parekh with Century 21 says he’s already seen the “psychological” shift tied to interest rates affecting his clients.
He says the initial 25-basis-point hike isn’t enough to grind the market to a halt.
Parekh pictures it more like the market was running at 150 km/h and the central bank’s announcement saw buyers ease off the accelerator to bring it to 120 km/h — still speeding, but to a lesser degree.
A few clients have come to him recently, however, and told him they’re putting their search on hold for the foreseeable future, so fed up are they by bidding wars and unattainable properties in Toronto.
2:26 Kingston, Ont. sees highest housing price increase in Canada in 2021
Kingston, Ont. sees highest housing price increase in Canada in 2021 – Feb 8, 2022
Even with some pausing the search, Parekh believes current pressures on Canadian’s pocketbooks are not lessening the demand for housing, but changing it.
“With all these factors, the rate increases, the price increases, the inflation … I’ve seen the demand change versus flooring,” he says.
While the past year of the pandemic has seen him work largely to find detached homes for his clients, he’s seeing some demand shift back towards Toronto’s more affordable downtown condo market.
He’s also increasingly doing deals outside the GTA for those who can’t afford the Toronto real estate market. He says he recently helped a client get a $600,000 side investment in Kingston to get an affordable stake in the housing market and passive income while continuing renting back in Toronto.
Parekh cites another example of a client who, forgoing plans of buying a detached home in the GTA, bought a condo in Burlington, Ont., and set out to renovate the bathrooms and other fixtures immediately in hopes of moving up to a townhome in the next few years.
“I’ve seen a shift from saving for your dream home to stepping up to your dream home,” he says.
Some buyers seeking cheaper pastures
Parekh says that in the past three months, three clients have told him that they no longer need his help to find a home.
It’s not because they’re giving up the hunt or found a property in Toronto — instead, they tell him they’re moving to Calgary.
Calgary is one of the major cities that remains a bit more affordable than surging markets such as Toronto or Vancouver.
The median price of a home in Calgary was just below $500,000 in the second week of March, according to the city’s real estate board. In National Bank’s most recent housing affordability report, the household income needed to afford the median home in the city was just over $106,000 — roughly half the same income needed to buy a home in Toronto.
Dahms adds Quebec City, Winnipeg and Edmonton as a few other standouts that have seen prices appreciate at a slower rate.
Indeed, Ross has found his frustrations amplified seeing three-bedroom homes going for half the price in other parts of the country as they do in London.
The Nova Scotia native says he’s seen east coast real estate remain an affordable option for Maritimers back home, and says that if the housing market in Canada doesn’t improve in the next two years, it’s inevitable that he might have to move his family to more welcoming harbours.
“It gets to the point where you have to consider if you can continue on,” he said.
“Even though this is my dream job … I’ll never, ever, have another opportunity, probably, to get hired at a school like Western. But if I can’t afford anything, it becomes a discussion you have to have.”
4:21 Lack of listings impacting real estate market in Manitoba
Lack of listings impacting real estate market in Manitoba
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.