BoC Holds Interest Rates, and the Income You’d Need to Afford a Home in 10 Big Canadian Cities

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.

The Interest Rate that Won’t Budge  

After keeping Canadians at the edge of their seats for years, the Bank of Canada’s interest rate announcements have become as certain as the outcome of a Harlem Globetrotters game. This week offered another non-surprise when Canada’s central bank elected to keep interest rates steady at the 5% level where it’s remained since July. After last week’s disappointing inflation data, economists suggest it may linger there for longer than originally anticipated. In a September survey of Canadian financial institutions, the majority believed rates would begin to fall by April; now economists expect rates to remain at their current levels through June.

The Greenbelt Blame-game Goes into Overtime

Just when you thought you had heard the last of the Doug Ford Greenbelt saga, newly discovered emails are giving the story the sequel nobody asked for. That’s because, after insisting under oath that he and his staff were not directly involved in choosing which parcels of protected lands to give away to connected developers, the Ontario Premier has been caught green-handed. Newly unearthed emails from a private server show that Ford’s former chief of staff knew more than he claimed, long before he claimed to have known it, raising new questions, fresh accusations, and calls for yet another investigation.

Here’s How Much of a Raise You Needed to Buy a Home in 2023

We all know that homeownership in Canada has gotten more expensive, but if you’re wondering just how bad things have gotten for first time homebuyers, Ratehub.ca has you covered. According to its 2023 affordability report, buying conditions were “terrible” in all 10 major cities studied last year — even those that saw declines in housing prices, like Toronto, Victoria and Hamilton — thanks to higher borrowing costs. The bump in income required to become a homeowner ranged from Winnipeg’s modest increase of $5,610 to Vancouver’s jaw-dropping $24,600 leap, with most cities landing somewhere between the $8,000 and $10,000 mark. 

Housing Targets to Dictate Immigration Targets  

Canada has never really harboured a widespread “blame the immigrants” sentiment, but ambitious newcomer targets are increasingly being criticized as antithetical to the country’s fight for housing affordability. That sentiment turned into actual policy this week when Canada’s housing and immigration ministers jointly announced the country would not bump up its permanent resident targets for 2026 beyond the 500,000 benchmark set for 2024 and 2025. The Federal Government is also setting a 2-year cap on undergraduate international student permits at 360,000 per year, representing a 35% reduction in the foreign student population compared to 2023. 

Toronto Rental Costs Had a Great Fall 

Like Bitcoin, Gamestop stock, and NFTs, the GTA’s rental market couldn’t maintain the explosive growth it experienced in the wake of the pandemic. In the last quarter of 2022, average rents hit a record-breaking annualized increase of 16.2%; one year later they saw the single largest quarterly decline outside of the lockdown days. According to a new report from Urbanation, asking rents in the GTA declined 5.7% in the last quarter of 2023. Prior to October the region was on track to see double-digit rent increases last year, but the decline in Q4 cooled annual growth to just 4%.  

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