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What interest rate hikes mean for renters, landlords, and variable mortgages

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Home of the Week, 971 Naphan Rd., Roslin, Ont.OneLook Photography

Here are The Globe and Mail’s top housing and real estate stories this week, with the lowest mortgage rates available in Canada today, commentary from our mortgage expert and one home worth a look.

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The latest interest rate hike is bad news for renters and some landlords

The implications of interest rate hikes reach far beyond homeowners with mortgages, reports Erica Alini. The Bank of Canada’s latest interest rate increase is expected to have widespread ripple effects for renters and real estate investors, too.

This is partially because high interest rates force would-be homebuyers to postpone a real estate purchase and continue to rent instead, the deputy chief economist at CIBC told Alini. And rates inching higher are likely to force some landlords to sell their properties. Even a small uptick in sales means fewer units available in a rental market where demand already far outstrips supply.

Variable-rate mortgage holders feeling the pressure after BoC announcement

The Bank of Canada paused its interest-rate hike campaign from February through May, which gave variable-rate mortgage borrowers a short reprieve from escalating costs, writes Rachelle Younglai.

With the latest increase from the Bank of Canada, borrowers with variable-rate mortgages face looming difficulties. The central bank’s summer interest-rate hikes will continue to stretch amortization periods, but with amortizations snapping back to their original lengths at renewal, many are in for inevitably higher monthly payments.

Copenhagen offers an example of how Vancouver could plan for the future

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An aerial shot of Copenhagen’s Carlsberg Byen, the 33-hectare former industrial district that is now partly owned by pension funds.Handout

Both Vancouver and Copenhagen are constrained geographically, and both are experiencing growth, writes Kerry Gold. Both cities are feeling the need for more housing supply, especially affordable housing.

While Vancouver is increasingly turning to towers to achieve housing supply, developers in Copenhagen have made creative moves that include refurbishing old silos for housing, as well as a 160-year-old industrial brewery district called Carlsberg Byen. Buildings in the district were largely repurposed, including the recycling of any demolished materials that went back into the new infrastructure.

The owner of the design studio behind the Carlsberg masterplan wants to remind planners that “new development demands so much from the people living there. They have to feel at home by recognizing an urban fabric they are familiar with.” People need plazas and gardens, places to meet each other – the life between the blocks of housing, he adds.

This week’s lowest available mortgage rates

Following encouraging inflation news north and south of the border, Canada’s five-year bond yield retreated from 4 per cent this week. It’s now down a whopping 30 basis points since its 16-year high on Monday, writes Robert McLister in his weekly column. That’s good news for fixed-rate mortgage shoppers. If this keeps up, we could see fixed rates edge down slightly by the end of next week. Variable rates, unfortunately, went up, he writes.

Upsizing from a condo to a house? Mind the price gap

At the opposite end of the housing spectrum from the downsizing boomer is the upsizing millennial or Gen Z, writes Rob Carrick in his weekly newsletter. Condos have long been thought of as a way for young adults to get started in the real estate market, but recent data suggests a reason for caution among people buying condos as a starter home.

With the real estate turnaround of early 2023, which favoured houses over condos, the price gap is growing, writes Carrick. Overall, houses in Canada are close to 40 per cent more expensive than condos, and cost more than double in 14 cities located in British Columbia and Ontario, plus Calgary.

Home of the week: Modern log cabin an homage to wood near Prince Edward County

  • Home of the Week, 971 Naphan Rd., Roslin, Ont.OneLook Photography

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971 Naphan Rd., Roslin, Ont.

From left to right, the rooms on the main floor almost seem to travel in time to the present: The living room/den has a massive fieldstone hearth and barnboard walls; the dining room is filled with tiger-stripe oak antiques and glass-globed brass lighting fixtures; and the kitchen evokes modern farmhouse with a huge granite-topped island over a playful turquoise lower cabinet, grey upper and pantry millwork and stainless steel appliances under a white-washed oak ceiling.

Along the back of the house is a hallway that connects the dining room, powder room and kitchen and has three exterior doors to the stone patio and side driveway and backyard. There are three more bedrooms on the top floor, and plenty of skylights to bring light into another lodge-like level filled with wood.

What do you think is the asking price for this house?

a. $859,000

b. $999,000

c. $1,100,000

d. $1,500,000

a. The asking price is $859,000.

 

 

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Two Quebec real estate brokers suspended for using fake bids to drive up prices

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September 11, 2024

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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.

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Montreal home sales, prices rise in August: real estate board

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September 6, 2024

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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.

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Canada’s Best Cities for Renters in 2024: A Comprehensive Analysis

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2 months ago

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July 24, 2024

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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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