Overnight Rate on Hold, and Canada Scraps First-Time Homebuyer Incentive

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.

Rate Cuts Are Coming, Just Not This Week

To nobody’s surprise, the Bank of Canada elected to leave interest rates unchanged from their 5% level despite a drop in inflation last month, but experts still believe cuts are on their way soon. In fact, earlier this week financial services firm Morningstar published what looks like something you’d find on a sports betting app for rate cuts in Canada this year, only this bookie has Canada in the win column. The firm gives June a 96% chance of seeing a 0.25% cut and says there’s a 94% chance of a half percent cut by September, so place your bets.

Spring Comes Early to the GTA  

With both the weather and the housing market heating up, the calendar is just about the only thing in Toronto that says it’s still winter. In its latest report, the Toronto Regional Real Estate Board found listings and sales leaped in February, while prices took a more modest hop. Transactions were up nearly 18% compared to the previous February, while prices edged up by 1.1%. TRREB attributes the early spring market to population growth and a resilient economy. The growth comes despite high interest rates, suggesting the market could see a blistering hot summer following an expected rate cut.

The Last of the First-Time Homebuyer Incentives

Last week the Canadian Mortgage and Housing Corporation scrapped one of its least popular programs. The ill-fated First-Time Homebuyer Incentive was introduced in 2019 and let first-time buyers share the risks — and rewards — of entering the housing market with the government. The shared-equity structure lets buyers sell 5% of the purchase price (or 10% for new builds) to the government, which would share in the upside or downside of the property value. Turns out, not a lot of Canadians wanted to co-own their first home with the feds. Those who do, however, have until March 21 to apply.      

Canadians Seeking Affordable Housing Have Nowhere Left to Look

A new report by the Canadian Mortgage and Housing Corporation outlines what most Canadians probably already knew: the affordability crisis went from being a big city problem to a whole country problem during the pandemic. According to the report, cities like Toronto and Vancouver have been overheated for decades, but buyers always had alternatives — until 2020. According to the report, “COVID helped spread the housing unaffordability contagion across the country,” thanks in large part to the rise of remote work. Now affordable units are practically non-existent in major markets, while a quarter of all renters struggle to make payments.   

Canadians Falling Behind on Mortgage Payments  

Get your tarps and buckets ready because mortgage delinquencies are going through the roof. According to Equifax, delinquency rates leaped 52.3% across Canada in the last quarter of 2023, compared with the same period in 2022. As per usual, things are worse in the country’s two most expensive housing markets, as missed payments increased 62.2% in British Columbia and a whopping 135.2% in Ontario. Equifax attributes the rise in missed payments to the large number of Canadians renewing at a higher rate, with prices climbing by an average of $457 at renewal, and more than $680 in Ontario and B.C.   

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