The challenges of going through a divorce in the current real estate market may begin as soon as one partner decides to move out.fizkes/iStockPhoto / Getty Images
Higher interest rates and strained affordability in the Toronto-area housing market are creating thorny issues for married couples going through separation or divorce.
The turbulence that often comes with relationship breakdown is magnified in 2023 if the couple owns property and needs to divide the value of the matrimonial home in a volatile real estate market.
“This is creating increased conflict,” says Lisa Chegini, managing partner at the family law firm Caspersz Chegini LLP in Vaughan, Ont., “It includes this whole unfortunate circumstance of each party’s money being held hostage in the home.”
The challenges may begin as soon as one partner decides to move out.
A spouse who wants to buy another house or condo unit may come up against the obstacles of low supply, high prices and stringent conditions around getting a mortgage, she says.
And moving into a rental property can be just as difficult with low vacancy rates and soaring rents, Ms. Chegini adds.
For most couples, the home is their biggest asset, she points out, and the timing of a sale becomes all-important. Some homeowners who purchased at the height of the market during the pandemic, for example, may not be able to sell for the same amount today.
In that case, one or both spouses might favour putting off a sale with the hope of fetching a higher price later.
There are caveats with that approach, warns Ms. Chegini, explaining that, when both spouses are on title, the one who moves out needs to keep paying half of the mortgage, property tax and insurance payments in order to benefit from a rise in value.
A spouse who is not on title is not entitled to any share of the gain in the value of the house after the date of separation.
Few people have enough cash to contribute to those carrying costs while they are also paying for rent or the mortgage on a new place, she points out.
Ms. Chegini is seeing adults move back in with their parents or siblings as a result.
The financial strain is exacerbating existing problems between many couples, she adds.
“It is more acrimonious than in the past.”
Such scenarios are also leading to an increase in the number of partners wanting to purchase the other’s share of the matrimonial home – especially when the couple has children.
Single parents often figure they won’t be able to afford another house in their neighbourhood, she says, and they’re reluctant to move the kids a long distance from their current school.
In family law, one partner does not have the right to buy out the other’s equity in the home, she points out, and a judge can’t order a reluctant party to agree.
Therefore, the only way to come to an agreement is for the two to co-operate, she says. If the couple is likely to clash, she advises them to sell instead.
In her own practice, she figures no more than 30 or 40 per cent of couples are able to reach such a deal.
In the past, couples would often estimate the value of the home and divide it up between them without bringing in an appraiser.
But market values have been fluctuating in the past couple of years, and sometimes one partner will try to gain an opportunity to increase their own wealth by speeding up a sale, stalling or shopping around for the appraisal that suits them.
“Once they see these appraisals coming in, they start fighting over the numbers,” she says.
Ms. Chegini is currently working on a file with one appraisal done in February and another in May. Prices in the Greater Toronto Area shot up 10 per cent or more during that time.
“Now we have a battle of the appraisals,” she says, adding that the spouses will likely take the matter to court.
But Ms. Chegini cautions that such legal wrangling is often not worthwhile because mounting legal fees will quickly erase any gain that one side makes. In her experience, couples often have trouble letting go of any amount above about $25,000.
Because of the recent flux in the market, Ms. Chegini now recommends that couples bring in an appraiser before they start even an informal negotiation around one spouse staying in the home.
The spouse who wants to keep the house may have trouble qualifying for a mortgage at current mortgage rates, Ms. Chegini warns. She has heard of couples trying to find creative solutions such as having the departing spouse remain on the mortgage so that the lender will see two incomes.
Those tactics involve all kinds of risk for the lender and the couple, she says, but the lack of housing is making it harder for one party to hold onto a house.
“The chronic shortage is really creating these pressing issues.”
Mortgage broker Jason Georgopoulos of Dominion Lending Centres, has also been meeting with couples who grapple with financing after a split.
In one case, a partner wants to buy the other’s share of the house but can’t qualify for a mortgage at a rate that makes sense, says Mr. Georgopoulos.
At the start of their negotiations, the couple calculated costs assuming a mortgage rate in the five per cent range. Now the spouse who wants to purchase needs to qualify at an interest rate of 8 or 9 per cent.
The changing circumstances have caused the couple to go back to the bargaining table, he says.
Appraisals, meanwhile, have been unpredictable.
“The valuations of properties are coming in all over the place – it almost changes week-to-week and month-to-month depending on what’s happening in your neighbourhood.”
Mr. Georgopoulos also urges the borrower to make a realistic decision about whether the financial burden they are taking on is feasible for the long term. He wants to ensure that clients are agreeing to a plan they can live with for five years or more.
“Just because I can get you the money doesn’t mean you should take it,” he says.
Ms. Chegini says lawyers who practice family law were hoping that turmoil would settle down as couples became accustomed to dealing with COVID-19. At the peak of the pandemic, many tensions arose around children and precautions such as masking and visiting family, she says.
But climbing interest rates and stubborn inflation have exacerbated many conflicts, she says, and people lack visibility about the future.
“There’s that feeling of loss of control because there’s no light at the end of the tunnel.”
In addition to the pain of marriage breakdown, couples are grappling with greater financial hardship if the property has lost value since they purchased it.
“They say, ‘I thought my biggest investment would have some kind of return – even if my relationship didn’t work out.’”
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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