Canadian Home Sales up Slightly, and Ontario Caps Rent Hikes

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.

Homes Sales Up Slightly After Interest Rates Drop Slightly

With a tiny reduction in interest rates comes a tiny increase in home sales. New data shows that the 25 basis point reduction in the key interest rate by the Bank of Canada in early June nudged the housing markets of Vancouver, Toronto and Montreal, each of which reported their first increase in transactions in months. At the same time, home sales remain well below last year’s levels, including a 19% drop in Vancouver, 16% in Toronto and 13% in Calgary compared to last June. Research suggests most buyers are waiting for a 100-basis point reduction before re-entering the market.

Confusing Economic Picture Makes Rate Decisions Anyone’s Guess

The rocky road to lower interest rates took another unexpected turn this week when Statistics Canada reported a .2% increase in the country’s unemployment rate, which now sits at 6.4%. The news came just weeks after the same agency reported an increase in inflation, with the consumer price index jumping from 2.7% to 2.9% in May, casting doubt on a July rate drop. The unexpected rise in unemployment is restoring hope in lower borrowing costs arriving in July, though experts warn it’s equally likely the Bank of Canada will hold off until September, in part due to increasing wage growth.

Ontario Announces Country’s Lowest Rent Cap

The country’s biggest province is imposing the country’s smallest rent increase, as Ontario announces its capping rent hikes at 2.5% for 2025. This is the third year in a row that landlords have been limited to a 2.5% increase and represents the lowest rate in the country — well below the national average 3.1%, which mirrors inflation. The cap applies to the 1.4 million Ontario rentals occupied for the first time before November 15, 2018. Landlords whose properties are not exempt can apply for a greater hike cap via the Landlord and Tenant Board, but only if they meet certain criteria.

Rent Increases Slowed in June

This month’s rental data fits firmly into the category of good news that doesn’t feel good, as prices increased at their slowest pace in over a year (woo!) to only 7% higher than last year (boo!). According to Rentals.ca data, the average rent for all property types in Canada now sits at $2,185 per month, or $1,918 for a one-bedroom and about $2,300 for two. Despite the overall increase, prices continue to come down in some of the country’s most expensive markets, including a 7.5% decline in Vancouver, 5% in Toronto and 4.8% in Hamilton compared to last year.

Preparing the Next Generation for Housing Affordability Challenges

Those who are hungry for knowledge are also going straight up hungry as they struggle to afford campus life. According to a recent survey by the student union at the University of Alberta, 13% of students are skipping meals and 11% are doing so more than twice a week as they contend with skyrocketing rents. The survey found that 17% of students had to manage unstable housing situations last year, including evictions and homelessness. According to the Globe and Mail such struggles are common on campuses coast-to-coast, with many unable to provide adequate and affordable housing for their student populations.

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