Mortgages Just Got Pricier and Rental Costs are on the Rise

This week’s top real estate stories.

By  Jared Lindzon | 2 minute read

Jul 14

Wahi's Week in Real Estate

Every Friday, Wahi brings you the most important real estate stories from the past week.

Canadian Money Just Got More Expensive  

The Bank of Canada has raised interest rates for a 10th time in just over a year, bringing its overnight rate to 5%, its highest point since 2001. The Bank says the .25% hike is necessary to tackle inflation, despite a dramatic drop in the consumer price index — from 8.1% a year ago, to just 3.4% in May. In its announcement the bank warned that CPI is expected to hover around 3% next year before reaching the 2% target in the middle of 2025, suggesting interest rates — and thus mortgage borrowing costs — aren’t dropping any time soon either.  

“The average Canadian rent increased 7.5% last year, while shared accommodations doubled that pace, increasing 15% in one year.”

Rate Hikes Put Ontario Housing Market on Ice

Following an overheated spring, June’s interest rate hike cast a chill on Ontario’s real estate market, and after another rate hike this week, the summer is only getting frostier. According to a new report by RBC last month’s largely unexpected hike spooked buyers in Toronto, Hamilton and Ottawa, with month-over-month sales in the GTA falling 6.9% in June, after increasing 32% in April and May. The good news, according to the report, is that supply is finally catching up to demand. That means there could be a slowdown in price increases in the months ahead.  

Rents Are Increasing Twice as Fast for Roommates   

Thinking of shacking up with a roommate to beat rent increases? Think again. According to a report by Rentals.ca the average Canadian rent increased 7.5% last year, while shared accommodations doubled that pace, increasing 15% in one year. It’s still cheaper to split costs, as the average roommate rental in Ontario was $996 — or $1,288 in Toronto — compared to a provincial average monthly rent of $2,219 for a one-bedroom. The report also found that the two most expensive cities for renters are in B.C., but the rest of the top 10 are all in the GTA.    

Toronto’s New Mayor Has a New Foe in the Fight for Housing Affordability  

Olivia Chow was sworn in on Wednesday, but earlier in the week Toronto’s new mayor called for a review of the province’s property assessment system, following accusations that some of the city’s most affordable homes are being overtaxed, while its priciest are getting a discount. A Toronto Star investigation accused the Municipal Property Assessment Corporation (MPAC) of assigning more affordable homes values higher than their sales price more frequently than the most expensive ones. MPAC says it compares property to similar ones in the area to determine its value, which is used to set revenue requirements and municipal tax rates.  

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Province Mulling Crackdown on Pre-Construction Price Gouging  

Some Ontarians who invested in pre-construction condos before the pandemic were surprised to find tens or even hundreds of thousands of dollars in additional fees tacked on as building costs ballooned. According to the CBC would-be buyers in cities across the province have found themselves in legal disputes with builders who changed the terms of what they thought was a done deal in the wake of rising costs. Now the Ministry of Public and Business Service Delivery is seeking input from those affected as it considers new rules to protect buyers of pre-construction condos from unexpected fees.

Jared Lindzon

Wahi Writer

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