Variable Mortgage Rates Gain Popularity, and Declining Interest Rates Have Little Little Impact on Would-be Buyers

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.

GTA Fire Sale

The Greater Toronto Area is overloaded with inventory, and everything must go! For a limited time only save $99,000 on a home in Mississauga or Markham, $113,000 to $130,000 in North York, and up to $186,5000 in Oakville’s Eastlake! According to Wahi’s latest report 70% — that’s right, 70%! — of GTA homes are selling below asking. Always wanted a GTA condo? Well now’s your chance, with prices slashed on 78% of units city-wide. Act now, because with interest rates dropping, prices these low won’t last long. So, hurry into the GTA housing market today!

Variable Rates Come Roaring Back 

Fool me once, shame on my mortgage lender. Fool me twice, shame on me for believing a variable rate will only go down. Despite the gut churning ride variable rate holders have been on the last few years — as rates went from near zero to generation highs — the unsteady option is again gaining traction. According to Canadian Mortgage Trends, brokers are seeing more clients opt for the cheaper and riskier choice after they recently went out style, for good reason. With rates back on the decline borrowers are rolling the dice and hoping things will turn out better this time.

Gravy Trainwreck for Ontario Developers

After years of record sales, Ontario’s condo market is crashing, and developers are getting burned. According to a recent report by the Toronto Star, 27 Ontario-based developers have gone into receivership this year, up from 18 last year, representing the highest number of developers facing financial dire straits the province has seen in years. Hardest hit are, unsurprisingly, condo developers, who saw sales drop to a 27-year low this summer. Now tens of thousands of planned housing units are being put on hold, as pre-sale buyers are left wondering if they’ll ever see their units, or deposits, again.

High Rents Go Lower, Low Rents Go Higher

With each passing month Canada’s traditionally lopsided rental market gets a little more balanced, and August was no different. According to the latest Rent Report by Urbanation and Rentals.ca, the country’s most expensive markets saw further price declines while the more affordable markets became less so. Average asking rents were down 7% in Toronto, 6% in Vancouver and Hamilton, and 1% in Calgary and Montreal since last year. Over the same period rents skyrocketed 22% in Quebec City, 18% in Regina and Saskatoon, 10% in Winnipeg and 9% in Halifax and Edmonton. Rents are up 5.9% this year nationwide.

Rate Cuts Having Little Effect on Housing Market

Canada’s would-be buyers and sellers spent two years waiting for interest rates to drop, but despite three consecutive cuts, it seems they’ll have to wait a little longer. That’s because those recent rate cuts have had almost no effect on the housing market, according to a new report by RBC. It found that despite some subtle movements following rate cut announcements — and despite high inventory levels in many major markets — prices remain flat, with both buyers and sellers remaining on the sidelines. The report concludes that the market won’t heat up until it sees much deeper cuts to interest rates.

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