Feds Unveil Spending Plan, and Canada’s Most Expensive City

This week’s top real estate stories.

By  Jared Lindzon | 2 minute read

Apr 19

Wahi's Week in Real Estate

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

Liberals Get Tougher on Housing as They Get Weaker in Polls

It’s a perfect storm for housing policy, as the ruling party finds itself far behind in the polls ahead of an election year that is likely to put housing front and centre. This year’s spending plan, which was unveiled on Tuesday, includes a slew of initiatives aimed at addressing the crisis. Overall, it aims to build 3.9 million homes by 2031, largely paid for by new taxes on the wealthy. The budget allocates billions for an apartment construction and loan program, addressing homelessness, rental protection, and housing infrastructure, as well as several hundred million for rental protections and modular housing

“Overall, the Liberal government aims to build 3.9 million homes by 2031, largely paid for by new taxes on the wealthy.”

Canada’s Most Expensive City Is No Longer the Pretty One  

Toronto is poised to edge out Vancouver in a national competition that nobody wants to win. According to a Royal LePage report, home prices are projected to jump 10% in the GTA in the last quarter of the year, compared to just 5.5% in Greater Vancouver. If the forecast proves accurate, it will make Toronto the nation’s most expensive housing market by the end of the year, taking the crown long held in the West Coast. The same report suggests the market is at a “critical tipping point” as prices start to climb following a slow start to the year.

Soaring Rental Rates Start Losing Momentum

After a year of persistent hikes, rent prices are stabilizing, including some desperately needed declines in the country’s most expensive markets. According to a new report by Rentals.ca, rents dropped by 0.6% between February and March, but finished the month 8.8% higher than March 2023. Prices declined in the country’s three most expensive markets last month, including a 0.4% drop in North Vancouver, 0.8% in Vancouver, and 1% in Toronto. While the trend will be welcome news to renters, rates are still up 21% since 2020, averaging $2,181 across all properties, including $1,915 for one-bedroom units and $2,297 for two.

Upside Down Inflation Data  

Inflation moved in the wrong direction in March, but from a different angle it actually did the opposite. While the consumer price index increased from 2.8% to 2.9% last month, much of the change was due to a rise in fuel prices. If you take gas out of the equation, inflation dropped from 2.9% to 2.8%, giving Canadians an Uno reverse card of economic news. In fact, the Bank of Canada, which typically prefers to take more volatile commodities out of consideration, announced the latest data was a move “in the right direction” suggesting rate cuts could be coming soon.

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Housing Starts Keep Not Starting  

The free market is great for a lot of things, but solving the housing crisis isn’t one of them. According to the latest data by the Canada Mortgage and Housing Corporation, the pace of housing starts dropped 7% last month compared to February. Seasonally adjusted housing starts were up 27% in Vancouver, but dropped by 26% in Toronto and 5% in Montreal. TD Economist Rishi Sondhi says the pace of new home construction is still “solid” despite the recent declines, given the state of the market, but warns of further declines in home construction for the remainder of the year.   

Jared Lindzon

Wahi Writer

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