Is the Toronto real estate market still one of the most expensive housing segments in Canada and the world? Yes.
Is the Toronto real estate market coming down from its record highs achieved during the coronavirus pandemic? Yes.
Before the once-in-a-century event, the Toronto housing market recorded exceptional gains, from single-detached residential properties to condominium units. Housing affordability was the talk of the town before February 2020. But, when the COVID-19 public health crisis decimated the global economy, it transformed into a situation of “you ain’t seen nothin’ yet.”
North America’s fourth-largest city enjoyed unprecedented gains on every front, be it sales activity or property valuations. The major urban centre skyrocketed amid falling interest rates, changing homebuyer trends, and fiscal and monetary expansion. Although the condo sector weakened in the first year of the pandemic, conditions started improving in the summer of 2021.
Now that the economy is on the other side of the pandemic, which means higher interest rates, the Toronto real estate market is adapting to this new landscape. This, of course, equates to some stabilization in housing sector.
So, how is the Toronto housing market performing as of late?
What You Need to Know About the Current Toronto Housing Market
According to the Toronto Regional Real Estate Board (TRREB), home sales plummeted 34.2 per cent year-over-year in August, totalling a little more than 5,600 transactions. Demand has considerably eased as prospective homebuyers weigh current conditions, whether higher interest rates or falling prices.
Price growth has slowed down at a notable pace. Association data show that the average selling price of all homes combined edged up just 0.9 per cent from the same time a year ago, rising to $1,079,500.
But TRREB added an important point: “The average selling price was also up slightly month-over-month, while the HPI [home price index] Composite was lower compared to July. Monthly growth in the average price versus a dip in the HPI Composite suggests a greater share of more expensive home types sold in August.”
Here is a breakdown of different property types based on sales and price year-over-year:
Detached
Sales: -26% to 511 units
Average Price: -1.7% to $1,648,209
Semi-Detached
Sales: -29.6% to 159 units
Average Price: -7.3% to $1,127,429
Townhouse
Sales: -44% to 182 units
Average Price: +0.4% to $913,410
Condo
Sales: -40.6% to 1,028 units
Average Price: +2.6% to $736,940
Supply has been mixed. New residential listings slipped 0.7 per cent, totalling 10,537 units in August. But active listings soared more than 62 per cent to 13,305 units. New housing construction activity has also been robust in the Toronto real estate market, Canada Mortgage and Housing Corporation (CMHC) data show. In August, housing starts climbed 12.55 per cent to 4,535 units. Year-to-date, there have been more than 27,000 units under construction, up nearly 4.5 per cent from the first eight months of 2021.
Mortgage Rates Weighing on Toronto Housing Market
Mortgage rates are north of five per cent – and climbing. The Bank of Canada (BoC) is expected to keep raising interest rates until inflation decreases significantly. This is expected to keep lifting the cost to service a mortgage during its amortization period.
“While higher borrowing costs have impacted home purchase decisions, existing homeowners nearing mortgage renewal are also facing higher costs,” said TRREB President Kevin Crigger in a statement. “There is room for the federal government to provide for greater housing affordability for existing homeowners by removing the stress test when existing mortgages are switched to a new lender, allowing for greater competition in the mortgage market. Further, allowing for longer amortization periods on mortgage renewals would assist current homeowners in an inflationary environment where everyday costs have risen dramatically.”
In other words, a rising-rate environment could leave new homeowners vulnerable to higher mortgages. The polls already confirm a concerning trend is forming in the mortgage market: Households have taken on too much debt, and they are not taking their mortgages seriously.
Experts contend that the Office of the Superintendent of Financial Institutions (OSFI) should think about weighing on the present stress test and determine if it continues to be applicable throughout the market correction.
“Is it reasonable to test home buyers at two percentage points above the current elevated rates, or should a more flexible test be applied that follows the interest rate cycle?” asked TRREB CEO John DiMichele. “In addition, OSFI should consider removing the stress test for existing mortgage holders who want to shop for the best possible rate at renewal rather than forcing them to stay with their existing lender to avoid the stress test.”
The mortgage stress test was designed to determine if homeowners could withstand a potential rate shock, which is typically about two per cent higher than the current rate. In June 2021, the minimum qualifying rate was revised: the rate offered by your mortgage lender plus two per cent or 5.25 per cent – whichever is higher.
A recent IG Wealth Management survey learned that more than half of Canadians are anxious about being able to afford their mortgage payments as interest rates increase. According to the online poll of 1,590 adults, just 39 per cent of respondents include mortgages in their monthly budgets.
“In many cases, monthly mortgage payments, along with taxes, account for one of the largest monthly expenses Canadians face,” stated Alana Riley, head of mortgage, insurance and banking at IG Wealth Management, in a news release. “So, while it is encouraging that so many reported having a monthly budget, it’s only providing a partial snapshot of their overall cashflow situation if they don’t factor in their mortgage.”
Meanwhile, with higher rates potentially extending the decline in prices heading into 2023, affordability will continue to play an important role in the broader Ontario real estate market.
“There are other issues beyond borrowing costs impacting housing affordability in the Greater Golden Horseshoe. The ability to bring on more supply is the longer-term challenge,” added TRREB Chief Market Analyst Jason Mercer.
How much higher will mortgage rates go? Will the Toronto real estate market continue easing? Can homeowners withstand the current inflationary and rising-rate climate? While 2022 might have been the start of the latest downturn, next year could be the more interesting time for buyers, sellers, analysts, and public policymakers.
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.
The provincial regulator responsible for policing B.C.’s real estate industry has ordered a former Realtor to pay $130,000 and cancelled her licence after determining that she committed a variety of professional misconduct.
Rashin Rohani surrendered her licence in December 2023, but the BC Financial Services Authority’s chief hearing officer Andrew Pendray determined that it should nevertheless be cancelled as a signal to other licensees that “repetitive participation in deceptive schemes” will result in “significant” punishment.
He also ordered her to pay a $40,000 administrative penalty and $90,000 in enforcement expenses. Pendray explained his rationale for the penalties in a sanctions decision issued on May 17. The decision was published on the BCFSA website Wednesday.
Rohani’s misconduct occurred over a period of several years, and came in two distinct flavours, according to the decision.
Pendray found she had submitted mortgage applications for five different properties that she either owned or was purchasing, providing falsified income information on each one.
Each of these applications was submitted using a person referred to in the decision as “Individual 1” as a mortgage broker. Individual 1 was not a registered mortgage broker and – by the later applications – Rohani either knew or ought to have known this was the case, according to the decision.
All of that constituted “conduct unbecoming” under B.C.’s Real Estate Services Act, Pendray concluded.
Separately, Rohani also referred six clients to Individual 1 when she knew or ought to have known he wasn’t a registered mortgage broker, and she received or anticipated receiving a referral fee from Individual 1 for doing so, according to the decision. Rohani did not disclose this financial interest in the referrals to her clients.
Pendray found all of that to constitute professional misconduct under the act.
‘Deceptive’ scheme
The penalties the chief hearing officer chose to impose for this behaviour were less severe than those sought by the BCFSA in the case, but more significant than those Rohani argued she should face.
Rohani submitted that the appropriate penalty for her conduct would be a six-month licence suspension or a $15,000 discipline penalty, plus $20,000 in enforcement expenses.
For its part, the BCFSA asked Pendray to cancel Rohani’s licence and impose a $100,000 discipline penalty plus more than $116,000 in enforcement expenses.
Pendray’s ultimate decision to cancel the licence and impose penalties and expenses totalling $130,000 reflected his assessment of the severity of Rohani’s misconduct.
Unlike other cases referenced by the parties in their submissions, Rohani’s misconduct was not limited to a single transaction involving falsified documents or a series of such transactions during a brief period of time, according to the decision.
“Rather, in this case Ms. Rohani repetitively, over the course of a number of years, elected to personally participate in a deceptive mortgage application scheme for her own benefit, and subsequently, arranged for her clients to participate in the same deceptive mortgage application scheme,” the decision reads.
Pendray further noted that, although Rohani had been licensed for “a significant period of time,” she had only completed a small handful of transactions, according to records from her brokerage.
There were just six transactions on which her brokerage recorded earnings for her between December 2015 and February 2020, according to the decision. Of those six, four were transactions that were found to have involved misconduct or conduct unbecoming.
“In sum, Ms. Rohani’s minimal participation in the real estate industry as a licensee has, for the majority of that minimal participation, involved her engaging in conduct unbecoming involving deceptive practices and professional misconduct,” the decision reads.
According to the decision, Rohani must pay the $40,000 discipline penalty within 90 days of the date it was issued.
