Toronto Housing Market Bounces Back, and New Financing Rules for Building Secondary Suites

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.

Toronto Market Registers a Pulse

Toronto’s housing market is rising from the dead, just in time for Halloween. According to our latest data, the GTA saw its first increase in overbidding since March with 13% of neighbourhoods now seeing average homes sell for more than asking, up from 8% last month. The finding is backed by a report earlier this week from the Toronto Regional Real Estate Board, which found that nearly 5,000 homes sold in the GTA in September, an 8.5% bump from last September’s roughly 4,600. The MLS Home Price Index Composite also suggests prices are down 4.6% since last year.

Embracing the (Secondary) Suite Life  

For some reason the federal government seems to be acting with a certain level of fervour to address housing market challenges this (election) year. After extending amortizations, increasing the cap on uninsured mortgages and eliminating the stress test for uninsured mortgage switches, the Feds unveiled its latest housing initiative, aimed at making it easier to build secondary suites. Canadian homeowners can now refinance up to 90% of their home’s value to finance a secondary suite for themselves or immediate family members on a 30-year amortization period while increasing their mortgage insurance home price limit to $2 million.

Is Everyone Ready to Un-Pause?

Sellers who have been waiting on the sidelines for the last two years are finally getting into the ring. According to Re/Max Canada the country’s major cities are seeing double-digit increases in condo inventory as sellers hope lower interest rates brings back buyers. Condo inventory jumped nearly 60% in the Fraser Valley and about 53% in the GTA, as well as 52% in Calgary and 45% in Ottawa. Despite the sudden glut of inventory, prices have increased in every city outside of the GTA, where they declined by 2%. Meanwhile, prices increased 15% in Calgary and 4% in Edmonton.

New Reports Reveal Who’s in Control of Toronto’s Condo Market 

Warren Buffett once said, “Only when the tide goes out do you learn who has been swimming naked,” and when Toronto’s condo market dried up, investors were left flapping in the wind. A new report by Statistics Canada found that investors own about 65% of Toronto condos under 600 square feet, giving them an outsized influence on when, where and how units are built. When interest rates increased, investors stopped buying, which CMHC reports resulted in 30,000 fewer housing starts nationwide in 2023. With rates trending down, however, Toronto once again has the most cranes in operation in North America.

AI Delivers Grim Outlook for Renters  

If you think rent is too high now, just wait. A new study from Concordia University used AI to consider how two-bedroom rents will be impacted by a range of economic factors. It found that the average rent in Toronto will climb from about $3,250 today to $4,100 by 2027, and $5,600 in 2032. In Vancouver, rents are projected to climb from $3,450 to $5,200 by 2027 and $7,750 by 2032. Two-bedroom rents in Calgary will increase from $1,900 to $2,200 by 2027, and $2,600 by 2032, while Montreal will go from $2,100 to $3,325 by 2027 and $4,325 by 2032. 

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