Ontario Budget Released, and Bank of Canada Confirms Rate Cuts Are Coming

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.

Ontario’s Bold Plan to Build Faster

Ontario dropped its annual budget this week, chock full of housing policies, and suffice it to say, people have opinions. The nearly $215 billion plan includes a three-year, $1.2 billion “Build Faster Fund,” $1 billion for core infrastructure projects, an expansion of the vacant home tax, and an updated non-resident speculation tax. The Toronto Region Real Estate Board approved the province’s plan to support modular housing and Ontario REALTORS® commended the infrastructure investments. Critics, however, pointed out that the province missed its own housing targets last year, and the new budget won’t be enough to achieve its goal of building 1.5 million homes by 2031.   

A Hot Summer Forecast in Canada’s Cottage Country  

The snow has barely melted and Canadians are already grabbing their coolers, flip-flops and floaties and heading out to cottage country in search of recreational property to call their own. According to a report by Royal LePage, rising demand, increased consumer confidence, limited supply and an anticipated drop in interest rates are heating up recreational markets across the country. The agency expects prices to climb 5% this year, up to an average of almost $680,000, after a 1% decline in 2023. That includes an 8% appreciation on single-family getaways in Ontario, and 17% among recreational condos in Atlantic Canada.

Housing Affordability Challenges Keeping Business Leaders Up at Night

Those priced out of the market can take some solace in knowing that housing affordability challenges are also keeping the country’s business leaders up at night. According to a recent survey conducted by KPMG, 94% of Canadian business leaders believe housing poses the greatest risk to the economy, and hope to see it prioritized in the upcoming federal budget. Furthermore, 87% believe the housing crisis will slow economic growth this year, given that Canadians don’t have much leftover cash to buy what they’re selling, and that employees are demanding higher incomes just to afford the roof over their heads.  

Soaring Condo Fees Are Pricing Torontonians Out of Starter Homes

Condos typically offer an affordable alternative to single-family homes, but rising maintenance fees are challenging that conventional wisdom, especially in the country’s hottest condo markets. According to an investigation by the Toronto Star, condo fees increased at twice the typical rate last year in a dozen Toronto neighbourhoods, growing 5.5% this year, compared to 2.72% last year, and 2.98% in 2022. Costs now average about $0.81 per square foot in Toronto, with some paying upwards of $1,000 monthly. Throw in a 9.5% property tax hike and even a starter home in Toronto is getting further out of reach. Separate analysis from Wahi found that 13 condo buildings in the GTA have monthly maintenance fees in excess of $1,000.

Bank of Canada Confirms Rate Cuts Are Coming  

Lenders, borrowers, financial markets, and everyday Canadians can talk all they want about an upcoming rate drop. Still, there’s only one voice that really matters, and late last week it finally spoke. Despite a general policy of remaining coy and avoiding setting any expectations, the Bank of Canada finally confirmed the thing everyone has been expecting — that rate cuts are likely in the months ahead, thanks to promising inflation data. The much-anticipated wink and nod came as part of the bank’s deliberations before its previous monetary policy decision, which confirms the Bank anticipates a reduction in rates this year.  

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