Fixed Rates Fall Again, and Housing Starts Up 7%

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. 

Mixed Messages on Inflation

Canada’s inflation data might be inflated. That’s because the hop in prices reported by Statistics Canada this week to 1.9% in January —  up from 1.8% in December — may have been more of a leap without Canada’s HST holiday, which expired Saturday. According to the data, a sizable increase in energy costs was offset by the temporary price break in January, the only full month it was in effect. In fact, food prices fell 0.6% from last year with the tax holiday, suggesting inflation could leap forward after it ends. Still, the data reduced the odds of a March rate cut.  

A Troubling Equation for Homeowners

Here’s a math problem simple enough for even those flunked high school math. According to CREA, supply is way up and demand is way down in Canada’s housing market, which, if we’re getting this right, means prices are about to take a tumble. According to the latest report, housing sales dropped 3.3% in January, especially towards the end of the month due to tariff threats. At the same time, listings increased 11% compared to December, representing the largest seasonally adjusted bump since the ‘80s, not including COVID. Though prices hardly budged, CREA – and basic math — suggest that won’t last.  

Fixed Rates Fall Again  

Fixed and variable rates have been competing for our affection, and a week after Valentine’s Day we still don’t know which to commit to! That’s because last week all five big banks cut their fixed mortgage rates, just a few days after 5-year variable rates caught up to fixed equivalents. Typically, when the two are on par, those who are bullish on the economy or seeking a more flexible borrowing option opt for variable. With both offering attractive rates, the possibility of more rate cuts and plenty of economic uncertainty ahead, there is no clear choice for Canadian borrowers.

Build Baby Build

If downtown sounds noisier lately, you’re not imagining it. According to CMHC,  construction is booming in Canadian cities, with housing starts up 7% last month in areas with a population of over 10,000, compared with a 3% increase nationwide. Montreal leads the way with a massive 112% increase in housing starts compared to last January, followed by Vancouver, with a 37% increase, both largely comprised of condos and apartment buildings. Toronto, however, saw housing starts decline 41% since last year, driven by a struggling condo market. While construction is up nationwide, however, CMHC warns that tariff threats add “significant uncertainty.” 

Is a Robot Setting Your Rent?

Canada’s former Deputy Prime Minister and current Liberal Leadership candidate Chrystia Freeland has us questioning the nature of our reality this week after accusing landlords of using AI to “squeeze renters.” Specifically, Freeland suggested that “big corporate landlords” are using the technology to analyze renters’ information, collude on pricing and set rates. The claim was based on a recent lawsuit by the American Department of Justice and a similar claim on this side of the border. The accusation, which came in a policy statement earlier this week, set off an investigation into the alleged practice by Canada’s Competition Bureau.   

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