Ontario Cottage Buyers Take a Pause, And Rents Drop Another 2.8% in April

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. 

Summer in the City

Ontarians dreaming of a lakeside getaway this summer may not be hitting the road any time soon. According to a new report by Re/Max Canada, the province’s cottage market is “more or less paused” thanks to economic uncertainty, despite prices dropping in half of Ontario’s recreational markets. Overall, 20% of those who feel less confident in the housing market this year than last say they’re going to wait and see before buying or selling. Also telling was that the hottest feature for most would-be cottage buyers wasn’t a private dock, beach or boat house, but an affordable price tag.

Bringing the Lake Home

Even if a recreational property isn’t in the budget, there’s a whole lot of lake in and around the GTA — and most are pretty “Great.” According to our data, listings that advertise “waterfront” features fetch an average premium of $100,000, but not all lakeside locations are priced the same. Halton region’s Roseland community sees waterfront homes selling for a regionally high premium of $353,750, while waterfront homes near the Scarborough Bluffs average $300,000 over landlocked neighbours. At the other end of the spectrum, homes in downtown Toronto’s Harbourfront area were priced lower on average than others in the city’s core.

Canadian Rent Continues to Plummet

Canada’s rental landscape is looking about as stable as the economy itself. According to the latest report by Urbanation and Rentals.ca, asking rents dropped another 2.8% in April nation-wide, representing the 7th straight month of declines. In fact, Halifax was the only major city to see prices increase, while the rest of the country saw steep declines; especially in Calgary, where asking rents dropped 10.4%. Rental rates were also down more than 5% in Toronto and Vancouver. Though prices have been plummeting, average rates are still 6.2% higher than two Aprils ago and 28% higher than April 2021.

Unemployment Wins the Ugly Statistics Pageant

Since the American President decided to wage the “dumbest trade war in history” against his allies, Canadian economists have been wondering whether it would lead to higher costs or higher unemployment, with significant implications for interest rates. If tariffs caused prices to rise, the Bank of Canada would likely raise interest rates; if it had a greater impact on employment, it would lower them. This week that question was answered by Statistics Canada, which reported that unemployment ticked up 0.2% in April, marking the highest non-pandemic level since 2017. As a result, experts believe another cut is coming in June.a certain unpredictable President south of the border.

Rule of Threes

Canada’s housing market has stalled despite lower interest rates, begging the question: how much lower do they need to go to get people back to buying? According to experts, the magic number 3 — specifically, below 3% interest rate on a five-year fixed mortgage. Last month some major banks briefly offered interest rates below 4% for the first time in years, but even that failed to bring buyers back into the market, suggesting most are waiting for 3% or less. That’s probably a long way off, however, as most of the country’s major banks are now offering five-year fixed rates over 4.25%.

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