A house for sale in Toronto’s Cabbagetown neighbourhood.Ammar Bowaihl/The Globe and Mail
For many buyers and sellers immersed in the spring rejuvenation of the Toronto-area real estate market, the Bank of Canada’s recent interest rate hike came as a sudden jolt.
The central bank’s rate-setting committee raised the benchmark rate by 0.25 points to 4.75 per cent in June after recent data showed the country’s economic growth was surprisingly robust in the first quarter. The Bank of Canada had paused a series of rate hikes earlier this year as the rate of inflation fell towards its target rate of two per cent but it has remained stubbornly high.
Industry professionals say calls flooded in from potential buyers, investors and existing homeowners as they grappled with the possible repercussions. Showings also slowed down in the days after the announcement as aspiring buyers absorbed the news, they said.
Now, insiders are watching to see if the shock wears off quickly.
One immediate effect, predicts Leah Zlatkin, a mortgage broker and expert with LowestRates.ca., is that many potential buyers with preapproved mortgage agreements will rush to use them within the next few weeks.
Still, Ms. Zlatkin is advising those entering the market for the first time to try to strike a deal before their preapproved mortgage agreement expires.
“That’s a very risky position for most young buyers to be in,” she said. “If you’ve got a preapproval in hand, go out and do your shopping.”
Ms. Zlatkin said she expects the market to remain hot for the next few weeks as people rush to put those agreements to use. She said buyers who don’t have an active preapproval may feel less urgency, while other buyers may bow out all together because they’re so shaken.
Ms. Zlatkin said that for homeowners who were holding out hope for a rate cut by the end of the year, the June 7 increase was the limit. She noted that existing homeowners with a variable rate may find the latest hike causes them to hit their trigger rate, when the interest applied exceeds their payment. People in that situation need to talk to a mortgage professional, she said.
Pritesh Parekh, real estate agent with Century 21 Legacy Ltd., said the announcement was a surprise for many. For investors who bought in early 2022, their monthly cash flow was manageable, but now they’ve seen nine interest rate increases from the Bank of Canada.
He said investors who bought properties to rent out are often paying significantly more each month in mortgage repayment and expenses than they receive from tenants.
“This may have been the last straw for some owners.”
Mr. Parekh said existing owners who want to move up the property ladder may still be able to do so because they have the ability to adjust their budget in line with the latest increase in borrowing costs, but first-time buyers looking at lower price points are being hurt even more.
“This is knocking so many people off the bottom rung of the ladder.”
John Lusink, president of Right at Home Realty and Property.ca, said some buyers may tap the brakes as they adjust to the news. “Up until then, we’ve seen a healthy increase in transactions,” he said. “It will be interesting to see if this quarter-point hike will apply the brakes again.”
Even before the announcement, listings were increasing earlier this month following a rebound in May, which saw the average price recover to within about 10 per cent of the peak in February, 2022.
Sales in the Greater Toronto Area jumped 24.7 per cent in May compared with the same month last year, according to the Toronto Regional Real Estate Board. New listings fell 18.7 per cent last month from May, 2022.
Compared with April, sales rose 5.2 per cent on a seasonally adjusted basis.
In May, the shortfall in supply compared with demand led to more competition in the GTA, according to TRREB chief market analyst Jason Mercer.
The average price in May reached $1,196,101 in the GTA to mark a 1.2-per-cent dip from the same month last year. Compared with April, the average price edged up a seasonally adjusted 3.5 per cent.
Mr. Lusink said the GTA has bounced back more quickly than some other regions in Ontario. While bidding contests have returned in some neighbourhoods in the Toronto area, helping to contribute to the uptick in prices, areas such as Barrie, Ottawa, Niagara and Windsor have longer days on market.
When it comes to existing homeowners, Mr. Lusink said banks have so far softened the impact by allowing many customers to extend the amortization period from the typical 25 years to 35 or 40 years in some cases.
Mr. Lusink expects sales to continue at a steady pace throughout the summer and he predicts demand will continue to outpace supply.
But he cautioned that each rate hike makes it more difficult for potential buyers to qualify for a mortgage.
As for the months ahead, the outlook is a little murky, Mr. Lusink says. He figures rate cuts in 2023 are likely off the table. There’s also a chance the economy may enter recession.
“It’s the fall I would be more worried about if we don’t get inflation under control,” he says, pointing to the possibility of another hike this year. “If there’s yet another, I think the parking brake will be pulled.”
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
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