Investors Own Most New Condos, and Canadians Can Soon Apply For a 40-Year Mortgage

This week’s top real estate stories.

By  Jared Lindzon | 2 minute read

Every Friday, Wahi brings you the most important real estate stories from the past week.

Many Canadians Couldn’t Afford Another Hike

Canadians are breathing a sigh of relief after the Bank of Canada decided against another rate hike, which would have pushed many over a financial cliff. According to one survey the majority of the country, 62%, has already been forced to exceed the CMHC’s recommended limit of using 30% of their pre-tax income on housing, which now averages 37% – 41% among mortgage holders. Another survey also found that 35% would need to change their financial situation in the event of another rate hike, with nearly one in 10 saying it would force them to sell their homes.  

Buying Our Way Out of a Housing Crisis, a Hundred Million Dollars at a Time

As the federal government throws money at the nation’s housing crisis, cities are lining up with outstretched arms. The latest gigantic cheque was made out to Brampton for a cool $114 million, designated to help the city build 3,150 homes in the next three years, and 24,100 over the next decade, as part of the $4 billion Housing Accelerator Fund. The latest giveaway marks the sixth and largest such investment, following similar agreements with London, Vaughan, Hamilton, Brampton, and Halifax. This week CMHC also published a top-10 best practices list for other cities looking to get in on the giveaway. 

Investors Own Most New Condos

Most Canadians use condos as homes. Most of their owners use them as investments. According to Statics Canada, most condos built in Toronto between 2016 and 2021 — 57% — are owned by investors, and that number is on the rise. Investors also owned 32% of row houses, 23% of semi-detached and 13.6% of detached homes in the city. Toronto isn’t alone either: investors own 48% of new condos in Vancouver; 55.5% in Hamilton; a staggering 80.5% in London; and 71.8% in Kitchener-Cambridge-Waterloo. Ironically these new condos haven’t proven to be great investments, as half of GTA investors have lost money.

Canadians Can Soon Apply For a 40-Year Mortgage

Some argue that a 40-year mortgage amortization is an effective way to keep Canadians in their homes; others believe it’s an effective way to “keep Canadians poor.” Now it looks like we’re about to find out which is right. Equitable, the country’s seventh largest bank — in partnership with a third-party lender — will soon start offering Canadians in B.C., Alberta, and Ontario an option to take on a 40-year term to help combat affordability challenges. That’s well above the standard 25- and 30-year terms, but not all that unprecedented given most banks are seeing huge increases in longer amortization periods. 

Roommates Wanted in Ontario

Ontario residents are going to have to get used to someone eating their food and leaving the dishes in the sink, as listings for roommates have skyrocketed. According to a recent report, ads seeking roommates in the province have climbed 78% in just the last three months, compared to the national average of 27%, and 40% in B.C. It’s not that surprising given that rents jumped 11% in Canada this year, requiring many to split the bills just to get by. In Toronto it costs more than $1,300 just to live with roommates, second only to Vancouver, at nearly $1,600.

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