Variable Rates Now in Vogue, and New Report Predicts Housing Affordability Will Improve in 2024

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.

Variable Rates are Back in Style  

Mortgage trends are proving as cyclical as fashion, with many Canadians thrifting for the throwbacks of yesteryear. During the low interest rate pandemic period, variable mortgages were as hot as loungewear at the time, accounting for about 57% of originations. They quickly went out of style as interest rates rose and people gradually left their homes. By the third quarter of 2023, borrowers wouldn’t be caught dead in one, with only 4.2% trying one on. As interest rates slowly decline, however, borrowers are going vintage, with nearly 13% back on the variable trend, according to the Bank of Canada.

Toronto Fights Renovictions  

Hog Town is taking a page from Steel Town as it looks to ban “renovictions.” The practice, whereby landlords kick their rent-controlled tenants to the curb under the guise of renovations, was banned in Hamilton this past January, and now the province’s most populous city is following suit. Last week Toronto City Council approved the motion and will hash out the details before the end of October.  Hamilton’s bylaw, which goes into effect on January 1, requires landlords to apply for a license within seven days of issuing an eviction notice and to make arrangements with tenants.

Some Affordability Improvements in Canada’s Long-Range Forecast  

Timing the housing market in Canada right now is like trying to throw a dart at a bullseye while blindfolded, in a hurricane. In recent years, prices have skyrocketed, then come down, but not enough to negate high interest rates, which are slowly starting to come down, but might not change again for a while. See what we mean? Fear not confused buyer, because Desjardins has some answers (but also questions). In a new report, they predict late 2024 and early 2025 will bring greater affordability for some buyers, and expect buying conditions to improve over the next two years.    

Mortgage Costs are Back on the Rise  

Canada’s fixed mortgage rates are starting to look like its professional hockey teams after once again failing to meet expectations. After two months of consistent declines, last week’s less than stellar inflation data — and less than stellar debate performance by Joe Biden — sent U.S. 10-year treasury yield soaring, along with Canadian bond yields, and with them the cost of fixed mortgages. Last month the bond hit its lowest point of the year but surged 30 basis points last week. After weeks of declining mortgage costs, experts say that trend is over until both countries see some signs of economic stability.  

Housing Costs Have Canadians and Newcomers Looking Elsewhere  

The Canadian dream is proving to be more of a housing nightmare for newcomers and residents alike. According to a recent Angus Reid survey, nearly 40% of new immigrants are thinking of leaving the province, or the country, due to housing costs. Furthermore, 28% of Canadians are thinking of leaving the province or the country because of affordability challenges, including 44% of those who live in downtown Toronto, 33% in metro Vancouver, and 25% in Nova Scotia. According to the study, many are looking to Alberta, south of the border, or outside of Canada and the U.S. for more affordable accommodations.

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