Interest Rates, the Housing Crisis, Affordability, and the Greenbelt Scandal

This year’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. This week, we wrap up 2023 with some of the biggest real estate news headlines of the year.

The Rising Cost of Renting  

As interest rates hit a 20-year high, they sent mortgage costs soaring, and rents followed closely behind. According to data from Rentals.ca rental fees were up 8.4% nation-wide this year and increased nearly every month. Average monthly costs across all home types reached $2,174 in November, up from just over $2,000 one year prior and $1,800 in 2021. The hikes were especially steep in the country’s mid-sized cities, where regions like Burnaby, Oakville, Scarborough, Laval, Quebec City, Halifax, and Edmonton each saw double-digit percentage increases for one-bedroom rentals this year. Despite the upward trend, Toronto rents somehow dropped by 2%. 

Interest Rates Take a Wild Ride

The Bank of Canada took the country on a wild ride in 2023, a year that saw unexpected stops and starts to interest rate hikes. The Bank kicked things off with a modest hike of 0.25% in late January, before holding the overnight rate steady at 4.5% in February. Just as the market began easing into a new normal, the BoC hit it with two consecutive increases of 0.25% in June and July, before pausing once again for the remainder of the year. Each of these moves brought more uncertainty to the market, grinding sales activity to a relative halt.

Federal Funds Try to Unclog the Housing Pipeline

This year saw the Federal Government take some significant (and expensive) steps towards addressing the housing market crisis and reassure Canadians that they won’t let it tank the economy without a fight. In April they announced the relaunch of Canada’s National Housing Strategy, and followed it up in August with a 10-year plan to invest $82 billion in a range of projects designed to help build more homes of all kinds, faster. Since then, the government — via the Canadian Mortgage and Housing Corporation — has dished out hundreds of millions to cities and towns to support a range of housing projects.     

Ford Chases the Green, Ends up in the Red 

Despite a historically tumultuous market, one of the biggest real estate headline-grabbers of 2023 was the saga of Doug Ford and the Greenbelt, and it’s easy to see why. The scandalous year kicked off with two separate probes into the Ontario Premiere’s handling of the protected lands, both of which found that he planned to give away about $8.3 billion-worth to connected developers. The scandal led to several high profile resignations, and dragged the Premiere’s approval rating to new lows.

The Dream of Homeownership Takes a Backseat  

There is good reason to believe that 2023 will go down in history as the year many Canadians gave up on the dream of home ownership, and it’s hard to blame them. Historically low interest rates led to historically high prices during the pandemic, while the rate hikes that followed further fueled affordability challenges. That one-two punch left many down for the count. A survey in September found that half of non-homeowners were losing hope in their ability to buy, and another in November found that nearly half of Ontarians had changed their housing plans as a result of higher rates.

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