In its latest announcement, the Bank of Canada has chosen to keep its target for the overnight interest rate unchanged at 2.75%. The Bank Rate remains at 3%, while the deposit rate stays at 2.70%. At first glance, this might seem like business as usual — no immediate changes, no cause for alarm.

But dig a little deeper, and it becomes clear that this decision comes against a backdrop of rising global uncertainty, particularly around U.S. trade policies and how those changes might ripple across economies — including our own here in Canada.

So, while the interest rates haven’t changed for now, there’s a lot going on behind the scenes that could impact your finances in the coming months.

Why Interest Rates Matter

Let’s take a quick step back. Interest rates are one of the central tools the Bank of Canada uses to manage inflation and economic stability. When the Bank raises rates, it becomes more expensive to borrow money, which tends to slow down spending and borrowing. When it lowers rates, borrowing becomes cheaper, encouraging more economic activity.

By holding the rate steady, the Bank is signaling a “wait and see” approach — neither encouraging aggressive borrowing nor pushing for a slowdown. That neutral stance tells us they’re watching current global developments closely and don’t yet feel it’s time to intervene further.

What’s Driving This Decision?

The biggest factor on the Bank’s radar right now is the uncertainty surrounding international trade, especially with the evolving U.S. policies. These policies are creating potential headwinds for global economic growth — and Canada, being a trade-dependent country, is particularly sensitive to those changes.

The Bank of Canada has laid out two possible scenarios that could unfold depending on how the trade situation plays out:

Scenario 1: Short-Term Uncertainty, But No Major Damage

In this first possibility, we see ongoing trade tensions but only limited tariffs being imposed. That would likely lead to some short-term slowing of growth in Canada — perhaps less business investment, more cautious consumer spending, and a bit of market wobble.

The upside? Inflation would likely remain close to the Bank’s 2% target, and the economic softness would be more of a temporary slowdown than a serious downturn.

Scenario 2: Prolonged Trade War and a Canadian Recession

The second scenario is more concerning. If trade tensions escalate into a longer-term, more aggressive conflict — with rising tariffs and retaliatory measures — the Canadian economy could fall into a recession.

In this case, inflation could climb above 3%, making everyday goods and services more expensive. At the same time, we’d be dealing with weaker growth, fewer jobs, and reduced consumer confidence.

Neither of these scenarios is certain yet — and the Bank is keeping a close watch on how things unfold before making any further rate decisions.

What This Means for You

Even though interest rates haven’t moved, the message here is clear: economic uncertainty is rising, and now is the time to get ahead of it.

Here’s how this could affect different parts of your financial life — and what you can do to stay prepared:

1. Your Mortgage or Loans

If you have a variable-rate mortgage or any loans tied to the prime rate, the good news is your payments aren’t going up — for now. But with so much volatility in the air, you’ll want to watch for signs that rates could rise in the future. It might be worth speaking with your lender about locking in a fixed rate if you prefer more stability.

2. Your Investments

This is a great time to revisit your portfolio. Are you diversified enough? Do you have a mix of assets that can weather market ups and downs? Uncertainty can lead to volatility, but it can also open doors to opportunities. Stay focused on your long-term goals, and don’t panic over short-term market noise.

3. Your Budget

With inflation potentially on the rise — especially in Scenario 2 — your cost of living could increase. Take a close look at your spending habits now. Tighten up where you can and build a bit of a buffer in case things get more expensive down the road.

4. Your Business or Career

If you’re a business owner or even an employee in a trade-sensitive sector, it’s important to stay informed and agile. Be ready to pivot or adapt if conditions change. For example, a shift in tariffs could impact your supply chain, pricing, or customer demand.

What Should You Do Now?

We’re not in crisis mode — but we are in a period of heightened awareness. That makes now the perfect time to evaluate your position:

• Reassess your financial goals.

• Check in with your financial advisor.

• Ensure your financial plan is flexible and future-proof.

• Stay informed on global and domestic economic developments.

Think of this as a chance to strengthen your foundation. You don’t need to make drastic moves, but staying proactive can help you navigate whatever comes next with confidence.

What’s Next?

The next scheduled rate update from the Bank of Canada is on Wednesday, June 4. That announcement could offer more clarity on how the Bank plans to respond if the trade landscape continues to evolve. If new inflation data or economic indicators shift significantly, we could see changes in the Bank’s approach.

Until then, the best thing you can do is stay informed, stay flexible, and stay ready.

As Canada’s major industries, including automotive, steel, and aluminum, face job uncertainty due to ongoing U.S. trade tensions, another shift is quietly happening in Ontario’s housing market — and this time, it might just be in favour of buyers.

Recent data from RPS-Wahi, a respected property valuation firm, shows a clear softening in the Greater Toronto Area (GTA) real estate landscape. For the first time in years, bidding wars — once a defining feature of the market — are slowing down. If you've been waiting for a sign to enter the market, this might be it.

A Cooling Market: What the Data Tells Us

Spring typically brings a flurry of activity to the housing market, with eager buyers and tight inventories driving up prices. But this year, it’s a different story in many GTA neighbourhoods. According to a recent RPS-Wahi analysis, a striking 65% of homes sold in March went for below the asking price — the same as in February, and significantly higher than the 53% recorded a year ago.

Even more telling is that only 20% of GTA neighbourhoods with five or more sales experienced overbidding last month. This suggests that aggressive bidding is no longer the norm, particularly outside Toronto’s core.

Condominiums have been hit hardest, with 75% of sales closing below the list price, while 58% of single-family homes also sold for less than asking. The softest region? Halton, where a mere 3% of homes sold at asking price, and just 22% sold over — a significant pullback from past years.

Homes Are Being Relisted — For Less

A clear signal of the changing market is the growing number of homes being relisted — sometimes for up to $400,000 less than their original listing prices, according to a report by Zoocasa. Sellers are adjusting expectations to reflect more cautious buyers and a broader sense of economic uncertainty.

That uncertainty is being felt outside the GTA as well. The Hamilton and Burlington areas, long seen as popular alternatives to the city, are also seeing slower activity. Data from the Cornerstone Association of Realtors shows that March 2025 recorded the lowest sales volume for that month since 2009, with only 701 units sold across Hamilton, Burlington, Haldimand County, and Niagara North. Overall, Q3 sales were 27% lower than last year.

Why Buyers Are Holding Back — and Why That Might Be a Mistake

Uncertainty in the broader economy, especially with concerns around U.S. tariffs and potential job losses in key sectors, has many would-be buyers on the sidelines. Benjy Katchen, president and CEO of RPS-Wahi, acknowledges that fear and uncertainty are real — but he also sees opportunity.

“There’s definitely hesitation in the market,” Katchen said. “But that hesitation is what’s giving buyers a rare moment to breathe.”

With fewer buyers entering the fray, there’s less competition, less pressure to rush, and more negotiating power for those who are ready to make a move.

The (Temporary?) Pause on Bidding Wars

Anyone who’s tried to buy a home in the GTA over the past decade knows the frustration of bidding wars. Properties often sold tens or even hundreds of thousands over asking, with buyers facing emotional rollercoasters and repeated losses.

But for now, that frenzy appears to be paused. Katchen doesn’t believe bidding wars are gone for good — they’re too ingrained in the Toronto real estate culture — but he does think we’re in a rare window.

“I don’t think we’ll ever see an end to that in Toronto,” he said. “It’s just a question of the cycle. It might be a pause for three or four months, but I don’t think we’ll ever see an end to that.”

Indeed, the only places still seeing strong overbidding are specific pockets of Old Toronto, where median sale prices hover around $1.3 million — out of reach for many first-time buyers.

Mortgage Rules Are Easing in Your Favour

While the real estate market cools, new mortgage regulations are creating more favorable conditions for buyers — especially first-timers.

The federal government has increased the price cap for insured mortgages from $1 million to $1.5 million, and extended amortization periods to 30 years for new buyers. These changes open up access to more financing options, reduce monthly payments, and make homes more attainable.

This shift could make previously competitive areas like Davenport, Sinclair West, and Danforth Village more attractive — especially for buyers looking for detached or semi-detached homes near downtown Toronto.

More Time to Make the Right Choice

In a hot market, buyers often have to move quickly — sometimes making offers within hours of a showing, waiving conditions, and accepting higher prices just to stay competitive.

But now? You can take your time. You can compare listings, book second visits, and negotiate pricing. That breathing room can make all the difference, especially for major financial decisions like buying a home.

“If I was a buyer, I’d rather buy where I can take a little more time to get a deal and get good financing than have to stand against 25 other people in a line and lose out several times before I finally get what I wanted,” said Katchen.

Interest Rates: Another Hidden Advantage

Interest rates, while not at pandemic-era lows, remain competitive — and in some cases, are trending downward. Buyers can still access five-year fixed mortgage rates under 4%, and variable rates have also dipped, making financing more affordable than many expected.

“It's a different market from an interest rate standpoint versus a year ago,” Katchen added.

For buyers with stable employment and a long-term outlook, the combination of better mortgage conditions, lower prices, and less competition is a unique trifecta.

Final Thoughts: Is This the Right Time to Buy?

While every buyer’s situation is unique, there are compelling reasons to consider entering the market now:

• Prices are lower — in some cases, significantly.

• Fewer bidding wars mean more negotiating power.

• Improved mortgage rules make higher-value homes more accessible.

• Interest rates are attractive and may decline further.

• You have more time to make thoughtful decisions.

Yes, the market is uncertain. Yes, the broader economy is still finding its footing. But those very conditions are creating a window of opportunity that smart, prepared buyers could benefit from — before the next wave of competition arrives.

Thinking about buying this spring? Let’s chat about what makes sense for your goals and timeline. It may just be your best chance in years to get into the market — on your terms.

On the hunt for a budget-friendly mortgage? You’ve just struck gold. Welcome to Canada’s most comprehensive guide on mortgage rates, designed to help you secure top-tier pricing from mainstream lenders and rate aggregators—provided their rates are up to standard.

Having access to a broad selection of reputable lenders significantly improves your chances of landing the best mortgage deal. But finding the lowest rate isn’t the end of the journey. If you want to minimize your total borrowing costs, you need to understand the key factors influencing mortgage pricing and how to negotiate effectively.

Below, we’ll walk you through the ultimate playbook for securing the lowest overall borrowing costs in Canada.

How to Qualify for the Lowest Mortgage Rates

Mortgage Insurance and Its Impact on Rates

The lowest mortgage rates typically require default insurance. Why? Because mortgage insurance acts as a safety net for lenders, reducing their risk and allowing them to offer better pricing.

Most new mortgages with less than a 20% down payment require insurance by law. While it might seem counterintuitive that putting less money down leads to lower rates, insured mortgages actually lower costs and risks for lenders compared to uninsured financing.

Quick tip: If you switch lenders at maturity without increasing your loan amount or amortization, ensure the new lender keeps your insurance in force—this can help you qualify for lower rates today and in the future.

Insurable Mortgages: The Next Best Option

Besides borrower-paid default insurance, lender-paid insured mortgages—also known as "insurable" mortgages—offer another way to secure lower rates. Insurable rates apply to conventional mortgages that meet the following criteria:

• At least 20% equity

• Amortization of 25 years or less

• An owner-occupied home purchased for under $1 million

Insurable mortgages often come with rates that are 10–25 basis points (bps) lower than uninsured rates. (One basis point = 0.01% or 1/100th of a per cent.)

Quick tip: A 10 bps rate savings can keep over $470 in your pocket over five years for every $100,000 borrowed with a 25-year amortization.

Key Requirements for the Best Prime Mortgage Rates

To qualify for the best mortgage rates in Canada, you’ll typically need:

• A credit score of 720+ (some lenders allow lower scores, but 720+ is a solid benchmark)

• A clean credit report (no recent missed payments or derogatory marks)

• Monthly housing costs below 39% of gross income (including mortgage payments, property taxes, heating, and half of condo fees, if applicable)

• Total monthly debt load under 44% of gross income (including housing costs, loans, alimony, child support, and 3% of any credit card balances)

• Provable income (via job letter, pay stubs, or tax documentation for self-employed borrowers)

• A closing date within the lender’s rate hold period (some of the best rates require closing within 30 days)

• A marketable home (rural or unconventional properties may not qualify for the lowest rates)

Quick tip: The government’s mortgage stress test often determines approval rates. As of November 21, 2024, the stress test no longer applies when switching lenders, provided the loan amount and amortization remain the same.

Understanding Rate Surcharges

If you’re a non-prime borrower, be prepared to pay significantly higher rates. Non-prime borrowers include those with:

• Bad or no credit history

• Hard-to-prove income

• High debt ratios

• Offshore residency

• Unconventional properties

These factors can add 100–200 bps or more to your rate, plus additional lender and/or broker fees (typically 1%+ of the mortgage amount). Here are some common rate surcharges:

• Amortizations over 25 years (if uninsured): +10 bps

• Amortizations over 30 years (if uninsured): +100 bps or more, plus lender fees

• Non-owner occupied rental properties: +10–25 bps

• Vacation homes: +10–25 bps

• Pre-approvals: +0–25 bps (most pre-approvals don’t close, so lenders charge extra to offset costs)

Quick tip: Only non-prime lenders offer amortizations over 30 years. If you need long-term flexibility, consider a home equity line of credit (HELOC)—its interest-only payments have an indefinite amortization.

How to Negotiate the Best Mortgage Rate

Securing the best mortgage rate takes strategy. Here’s your eight-step survival guide for mortgage negotiations:

1. Confirm whether you qualify for prime rates using the checklist above.

2. Decide on the best mortgage term (seek professional advice if needed).

3. Determine your mortgage type: Insured, insurable, or uninsurable.

4. Shortlist promising rates and call lenders to assess their terms.

5. Consult an experienced mortgage broker to see if they can beat those rates.

6. Ensure the lender’s terms match your five-year financial plan.

7. Compare the overall cost of different options beyond just the rate.

8. Apply and lock in your rate to protect against potential rate increases.

Quick tip: High-volume brokers often get better pricing from lenders. Choose a full-time broker who’s closed $10M–$25M in mortgages over the past year.

Key Mortgage Features That Matter More Than the Rate

The lowest rate isn’t always the best deal. Flexible mortgage terms can save you thousands down the line. Here are some key features to look for:

1. Portability

If you might move before your mortgage matures, ensure your loan is portable—this lets you transfer it to a new home without penalties.

2. Mid-Term Refinancing

If you might need to borrow more later, ensure your lender allows mid-term refinances without hefty penalties.

3. Prepayment Privileges

If you plan to make extra payments, check for flexible prepayment options. Some mortgages allow 10–30% annual prepayments, while low-frills mortgages may restrict you.

4. Fair Prepayment Penalties

If you need to break your mortgage early, penalties can vary widely. Big Six banks often use higher penalties than fair-lending institutions.

5. Rate Drop Policies

Some lenders let you reset your rate if market rates drop before closing. Others don’t offer this feature.

6. Bridge Financing

If you’re buying a new home before selling your old one, check if your lender offers cost-effective bridge loans.

7. Cash Rebates

Some banks offer cashback incentives (sometimes over $4,000), which can reduce your borrowing costs—but they may claw this back if you break the mortgage early.

Final Thoughts: Ask These 7 Questions Before Locking In Your Mortgage

1. Can you buy down my rate further?

2. How long is my rate guarantee?

3. What are the prepayment terms and penalties?

4. How is the interest compounded?

5. Are there reinvestment fees if I break the mortgage early?

6. What’s your rate drop policy if rates fall before closing?

7. Do you cover all legal and appraisal fees when switching lenders?

A well-negotiated mortgage can save you thousands over its term. By understanding mortgage pricing, qualification requirements, and key lender terms, you can confidently navigate the mortgage landscape and secure the best deal possible.

The Allure and Challenges of Loft Living: A Buyer’s Guide

Loft apartments have long been associated with creative spaces, urban charm, and industrial aesthetics. Whether you’re considering purchasing a true loft in New York City or a converted industrial unit in Hamilton, Ontario, understanding the benefits and challenges of loft living is crucial. In this guide, we’ll explore what makes lofts unique, where to find them, and the key considerations before making a purchase.

What is a Loft Apartment?

A “true loft” refers to an apartment originally designed for industrial or commercial use that has been converted into a residential space. These spaces typically feature:

• High ceilings, often over 12 feet

• Large, factory-style windows allowing ample natural light

• Open floor plans with few interior walls

• Exposed beams, ductwork, or brickwork that preserve the industrial aesthetic

Unlike traditional apartments, lofts offer a unique blend of history and modernity, allowing homeowners to create personalized, expansive living spaces.

The Appeal of Loft Living

Loft apartments have gained popularity for several reasons:

1. Aesthetic and Design Potential

   The industrial-chic appeal of lofts is one of their biggest draws. The high ceilings, large windows, and open floor plans provide a sense of space and flexibility. Homeowners can create custom layouts, install mezzanines, or maintain the minimalist charm.

2. Natural Light and Airiness

   The oversized windows characteristic of lofts bring in plenty of natural light, making the space feel bright and open. For those who appreciate a well-lit home, lofts are an excellent option.

3. Live-Work Possibilities

   Many lofts, particularly those in artist communities, offer the opportunity to combine work and living spaces. This makes them ideal for entrepreneurs, freelancers, and creatives who require open space for studios or offices.

4. Prime Urban Locations

   Loft conversions typically occur in industrial districts, which are now some of the trendiest urban areas. Whether in Manhattan’s SoHo or Hamilton’s downtown core, these locations provide proximity to cultural hotspots, dining, and entertainment.

Loft Markets in New York City and Hamilton

Manhattan: The Loft Capital

In Manhattan, true lofts make up about 10% of the co-op and condo market. Many of these are found in former manufacturing districts like SoHo, Tribeca, and Chelsea. Because they are relatively rare, they tend to command higher prices than conventional apartments. Some areas in Brooklyn, such as Williamsburg and Dumbo, have also become loft hotspots, offering slightly more affordable options.

Hamilton’s Core Lofts: A Canadian Alternative

Hamilton, Ontario, has emerged as an attractive alternative for loft buyers looking for affordability and unique spaces. Core Lofts at 66 Bay Street South is a prime example. Originally a communications building, this complex was converted into residential units in 2005, preserving industrial elements while incorporating modern comforts. A unit like #105, featuring two levels, polished concrete floors, and 20+ foot ceilings, offers an appealing mix of urban sophistication and historic charm.

Challenges of Loft Living

While lofts have undeniable appeal, they come with their own set of challenges that buyers should consider:

1. Heating and Cooling Costs

   Due to high ceilings and large windows, lofts can be costly to heat in the winter and cool in the summer. Energy efficiency can be a concern, especially in older buildings with outdated insulation.

2. Lack of Defined Spaces

   The open concept of lofts is a double-edged sword. While it provides flexibility, it can also make privacy a challenge. Creating designated areas for bedrooms, workspaces, and living areas may require creative solutions like partitions or furniture placement.

3. Maintenance of Older Buildings

   Many true lofts are located in historic buildings that may have maintenance issues such as drafty windows, outdated plumbing, or structural concerns. Prospective buyers should carefully inspect a loft’s infrastructure before purchasing.

4. Zoning and Legal Considerations

   Some lofts were not originally intended for residential use, leading to zoning or certificate of occupancy complications. It’s essential to confirm that the unit complies with local residential codes.

Buying a Loft: Key Considerations

If you’re set on purchasing a loft, here are a few critical factors to keep in mind:

• Check the Building’s History: Research whether the building was converted for residential use and whether there have been any legal or structural issues.

• Evaluate the Amenities: Some loft buildings offer modern amenities like fitness centers and rooftop terraces, while others may have minimal services.

• Understand the Maintenance Fees: Lofts in older buildings may have higher maintenance costs due to their history and structure.

• Consider Your Lifestyle: Loft living is best suited for those who appreciate open spaces and urban aesthetics. If privacy and traditional layouts are priorities, a loft may not be the best fit.

Is a Loft Right for You?

Lofts offer a unique blend of history, character, and modern urban living. Whether in the heart of Manhattan or an up-and-coming city like Hamilton, they provide an opportunity to create a customized, spacious home. However, potential buyers should carefully weigh the pros and cons, ensuring the space fits their lifestyle and budget.

For those who appreciate high ceilings, expansive windows, and industrial charm, loft living can be a dream come true. But like any home purchase, due diligence is key. By understanding the market, considering potential challenges, and evaluating personal preferences, buyers can make an informed decision and find a loft that truly feels like home.

Canada’s New Prime Minister, Interest Rate Cuts, and the State of the Housing Market

Canada has a new prime minister, and with that comes significant economic and policy implications. Mark Carney, a former central banker, has taken the helm without a general election, leading to discussions about his policies and what they mean for the country. Additionally, the Bank of Canada has introduced more interest rate cuts, which will impact mortgage rates, homeownership, and the rental market. This blog delves into these crucial topics and what they mean for Canadians.

Mark Carney as Canada’s New Prime Minister

Mark Carney, a well-known figure in the global financial community, has stepped in as Canada’s new prime minister. Having previously served as the Governor of the Bank of Canada and later as the Governor of the Bank of England, Carney brings a wealth of experience. However, his transition from central banker to politician has raised concerns among many Canadians, as he was not elected in a general election but rather installed by members of the Liberal Party.

Carney’s policy inclinations have sparked debate, particularly regarding the energy sector. He is a strong advocate for Net Zero policies and the Environmental, Social, and Governance (ESG) movement. His past involvement in the Net Zero Banking Alliance, which sought to redirect financing away from fossil fuels toward renewable energy, has led some to question whether he will support Canada’s resource-driven economy. Given Canada’s wealth of natural resources, including oil, gas, and minerals, policies that restrict their development could have significant economic consequences.

Potential Implications for the Housing Market

One of the most pressing questions surrounding Carney’s leadership is his approach to housing. During a recent panel discussion, Bob Rennie, a key player in Vancouver’s real estate sector, revealed that he has been working with Carney on a proposal aimed at revitalizing the rental market. The plan suggests allowing foreign buyers to purchase Canadian properties under the condition that they commit to renting them out for 25 years. Additionally, it proposes using the Canada Mortgage and Housing Corporation (CMHC) to provide subsidized loans to these foreign investors.

Reopening the Market to Foreign Buyers

Currently, Canada has a foreign buyer ban in place, implemented in 2023 under Prime Minister Justin Trudeau in response to concerns about affordability. However, many argue that foreign capital still finds its way into the market through Canadian permanent residents or family members. By officially reopening the market to foreign investors and offering them preferential financing, the government hopes to stimulate housing construction. The catch is that these properties must remain rental units for a quarter-century.

While some developers see this as a necessary move to revive the pre-construction condo market, others worry that it could inflate property prices and divert taxpayer-subsidized financing to non-Canadians. The debate over whether this policy will help or hurt affordability continues.

The Pre-Construction Condo Market Crisis

A major concern in the housing sector is the collapse of the pre-construction condominium market. Developers are struggling to sell units due to high interest rates, declining rents, and an overall pullback from investors. As a result, many projects have been delayed or canceled, leading to a projected shortage of housing supply in the coming years.

Rising construction costs, coupled with a lack of investor confidence, have exacerbated the issue. If developers cannot meet their pre-sale requirements, they cannot secure financing to build. This could result in a severe housing supply crunch in the next five to seven years, contradicting the government’s goal of increasing housing availability.

Bank of Canada’s Interest Rate Cuts

In response to economic uncertainty and a weakening housing market, the Bank of Canada has continued cutting interest rates. This week, the central bank announced a 25-basis-point reduction, bringing the policy rate down from its peak of 5% to 2.75%. Some analysts predict that rates could drop to 2% by the end of the year, providing relief to borrowers.

Impact on Mortgage Rates

With rates falling, variable-rate mortgages are becoming more attractive again. As of now, the average variable mortgage rate sits around 4.25%, aligning with many fixed-rate options. Some borrowers can secure three- or five-year fixed mortgages at rates as low as 3.99%.

However, deciding between a fixed or variable mortgage remains a challenge. While variable rates could drop further if the Bank of Canada continues its cuts, global economic volatility—especially with ongoing trade tensions—makes fixed rates a safer bet for those seeking stability. Borrowers must consider their risk tolerance, job security, and cash reserves before making a decision.

Rising Inventory and Declining Rents

Another major development in the real estate market is the increasing inventory of unsold properties. In both Vancouver and Toronto, unsold pre-construction units have reached record highs. Meanwhile, the resale market is experiencing an influx of new listings, further increasing supply.

Adding to the challenges, rental rates are beginning to decline. According to Rentals.ca, the national average rent has fallen by 5% year-over-year, with larger drops in key metropolitan areas. In Vancouver, for example, rents have declined by 7-10% from their peak levels. This shift is particularly concerning for investors who purchased pre-construction units at high prices, expecting rents to remain strong. Now, many are facing negative cash flow, leading to distress sales and further price declines.

The Looming Issue of Pre-Sale Closings

A growing issue in the condo market is the wave of pre-sale closings that are now occurring at valuations lower than their original purchase prices. Many buyers who secured pre-construction units years ago at higher prices are now struggling to close due to a combination of declining values and higher borrowing costs. In some cases, buyers are finding that their unit’s current market value is 5-10% lower than what they originally paid, making it difficult to secure the necessary financing.

On top of this, closing costs such as GST, property transfer taxes, and realtor fees add another layer of financial strain. Many investors who intended to flip their units for a profit are now facing six-figure losses, further dampening sentiment in the pre-construction market.

Final Thoughts: What Lies Ahead?

The combination of a new prime minister, an uncertain economic outlook, and shifting housing policies makes this a pivotal moment for Canada. While Carney’s background as a central banker suggests a deep understanding of economic fundamentals, his commitment to climate policies and government intervention in housing raises concerns among many stakeholders.

The proposed plan to reopen the market to foreign buyers with CMHC-backed financing is controversial, as it could either revitalize housing construction or exacerbate affordability issues. Meanwhile, interest rate cuts may provide temporary relief to homeowners, but they won’t solve the fundamental supply and demand issues in the housing sector.

The coming months will be critical in shaping Canada’s economic trajectory. With ongoing trade tensions, fluctuating interest rates, and an evolving housing crisis, policymakers will need to strike a careful balance to ensure stability and growth. Canadians should stay informed and prepared for further shifts in the market.

Economic uncertainty is currently gripping Canada and the United States, particularly within the real estate sector. Investors and homebuyers who are making million-dollar or multi-million-dollar transactions require stability and certainty. However, with policy shifts and unpredictable economic events, the real estate market is experiencing significant turbulence. Every time there is a shift in government policy or economic conditions, the market tends to freeze.

If we examine the latest data from Vancouver and Toronto, the two largest real estate markets in Canada, we see a sharp decline in housing activity, particularly on the sales side. Vancouver home sales have declined by 11% year over year. While this might not seem drastic at first glance, zooming out reveals a concerning trend. February 2024 was one of the slowest months for sales in the last 25 years, trailing only behind 2019, 2013, and 2009. Inventory is beginning to build, but primarily in specific sectors—most notably, the condo market.

A Surge in Condo Listings and Investor Sell-Offs

New listings hit record highs in January and February, particularly in the condo market. Many investors are exiting due to years of negative cash flow, high mortgage rates, and softening rental conditions. Vacancies are increasing, and units are taking longer to rent, leading many investors to cut their losses. However, as they attempt to sell, they face an illiquid market due to an inventory surge.

Suburban markets are witnessing significant shifts as well. Since 2015, suburban condo prices in Greater Vancouver, particularly in the Fraser Valley, have doubled. The pandemic fueled demand as remote work became more common, pushing buyers further from city centers. However, as interest rates increased, these local end-user markets—often more sensitive to financial fluctuations—are seeing inventory pile up. Standing inventory in the Fraser Valley’s condo market is now at an all-time high. Historically, when inventory surges to such levels, prices tend to fall.

The Greater Toronto Area (GTA) is experiencing similar issues. Seasonally adjusted home sales declined by 28% on a month-over-month basis, marking the steepest drop since the pandemic and the global financial crisis. The condo segment, particularly among investors, is facing the most challenges. Pre-construction condo sales in 2024 hit a 30-year low. If developers cannot pre-sell units, they simply do not build, leading to a sharp drop in future housing supply.

Government Intervention and Pre-Construction Market Struggles

The British Columbia government recently extended the pre-construction sales period from 12 months to 18 months to allow developers more time to secure financing. This policy shift acknowledges the challenges in the pre-construction market, where projects are struggling to get off the ground. A similar trend is emerging in the GTA, where developers are also struggling to sell pre-construction units, further impacting future housing supply.

Despite the slowing construction market, the federal government is fast-tracking 6,000 undocumented construction workers. This move is ill-timed, as housing starts are already declining rapidly. The demand for construction workers was high during the peak of the market in 2020-2022, but with housing starts now plummeting, the industry will soon face an oversupply of labor. Many construction workers may struggle to find work as current projects wrap up and fewer new developments begin.

Tax Policies and Housing Market Challenges

In an effort to address budget deficits, the British Columbia government has increased the speculation and vacancy tax from 2% to 3% for foreign owners and from 0.5% to 1% for Canadian residents. This tax primarily affects secondary homeowners who use properties as vacation homes. The unintended consequence is that these taxes may discourage investment in housing markets where additional supply is already limited.

Adding to the complexity, the BC government has mandated multiplex housing across the province to increase density. However, utility companies, particularly BC Hydro, are struggling to meet the demand for new developments. Multiplex units require significant electrical infrastructure, including large transformers (PMTs), which take about 12 months for approval. Developers face high holding costs due to these delays, reducing the feasibility of these projects. If natural gas heating were permitted, many of these delays could be avoided, but current policies mandate electric-only heating, further complicating new developments.

The Road Ahead for Real Estate

The Canadian real estate market is at a critical juncture. Uncertainty surrounding economic policies, interest rates, and government intervention is creating an environment where investors and homebuyers are hesitant to act. The data suggests that condo markets, particularly in suburban areas, are at the highest risk of price declines due to rising inventory and decreasing demand. Meanwhile, pre-construction markets are stagnating, which will impact housing supply in the coming years.

Policymakers must carefully consider the timing and implications of their decisions. Fast-tracking construction workers during a market downturn, increasing taxes on secondary homes, and imposing rigid development regulations could exacerbate the current slowdown. Market participants must navigate these challenges with caution, keeping an eye on economic trends and policy changes that could impact their investments.

As the situation continues to evolve, it is essential to monitor housing activity, interest rate trends, and government policies. The coming months will be critical in determining whether the market stabilizes or if further turbulence lies ahead. Investors and homebuyers should prepare for continued uncertainty and make informed decisions based on the latest market data.

Housing Market and Economic Concerns

In recent years, the housing market has become one of the most pressing issues for policymakers, economists, and everyday citizens. With the cost of living rising significantly, particularly in urban centers, homeownership has become an increasingly distant dream for many Canadians. The government has introduced various policies aimed at addressing affordability concerns, but their effectiveness remains a topic of debate. One of the primary tools employed to curb rising home prices has been taxation, specifically targeting foreign investments. While these taxes were designed to limit speculative purchases by non-residents and free up housing for local buyers, their impact has been mixed. Many experts argue that these measures only complicate the market, failing to address the root causes of high housing costs while adding new barriers to investment and development.

A crucial aspect of the housing affordability crisis is the rising cost of living, which has put immense pressure on Canadian households. Factors such as wage stagnation, increasing interest rates, and supply shortages have exacerbated the situation. While the government has made efforts to introduce policies aimed at increasing housing supply, the time required for new developments to reach the market means that short-term relief remains elusive. Additionally, regulatory hurdles and high construction costs have slowed the progress of new housing projects, further constraining supply.

Another point of discussion is the role of foreign buyers in the real estate market. While foreign investment taxes have been implemented to curb speculation, critics argue that these policies have limited impact on housing affordability for local residents. Instead, the main drivers of high home prices appear to be domestic in nature, including population growth, limited housing supply, and high demand in key metropolitan areas. Some experts suggest that alternative solutions, such as increasing housing density, streamlining development approvals, and investing in affordable housing programs, would be more effective than punitive taxation policies.

Moreover, there are concerns about the unintended consequences of government intervention. For example, rent controls, while designed to protect tenants, may discourage new rental housing developments, exacerbating supply shortages. Similarly, high property taxes and restrictive zoning laws can disincentivize investment in the housing market, leading to sluggish growth and limited options for buyers and renters alike. It remains to be seen whether the government's current approach will yield the intended outcomes or merely create additional challenges for the housing market.

Inflation and Economic Predictions

Beyond housing, inflation remains a major concern for the Canadian economy. Recent Consumer Price Index (CPI) data indicate that inflation is running slightly higher than expected, raising questions about the effectiveness of the Bank of Canada's monetary policy. Key components of inflation, such as energy prices and the cost of shelter, continue to drive overall price increases. While some rental markets have shown signs of stabilization, the broader inflationary environment remains uncertain.

Energy prices, in particular, have been a significant contributor to inflationary pressures. As global oil prices fluctuate and supply chain disruptions persist, Canadian consumers have felt the impact through higher fuel and utility costs. These rising expenses have not only strained household budgets but have also increased costs for businesses, potentially leading to further price hikes across various sectors.

The housing component of inflation is another major factor. Although some rental markets have seen declines in prices, homeownership costs remain elevated due to high mortgage rates and ongoing supply shortages. The Bank of Canada has been closely monitoring these trends, adjusting interest rates in an attempt to manage inflation without stalling economic growth. However, the effectiveness of these measures is uncertain, and there are concerns that aggressive rate hikes could push the economy toward a recession.

Economic forecasts remain mixed, with some analysts predicting that inflation will persist in the short term before gradually easing, while others warn of a potential resurgence in price pressures. The global economic environment adds another layer of complexity, as geopolitical tensions, supply chain disruptions, and changing trade dynamics continue to influence domestic economic conditions.

A critical question is how the Bank of Canada will navigate these challenges. The central bank faces a delicate balancing act: raising interest rates too aggressively could dampen economic growth and trigger a recession, while failing to act decisively could allow inflation to become entrenched. The coming months will be crucial in determining whether policymakers can steer the economy toward stability without causing significant disruptions.

Conclusion and Final Thoughts

As discussions about housing affordability and economic stability continue, it is essential for Canadians to stay informed about the factors shaping the market. Government policies, inflation trends, and monetary decisions all play a role in determining the economic landscape. While policymakers strive to address these challenges, the effectiveness of their strategies remains a subject of debate.

For prospective homebuyers and investors, understanding these dynamics is crucial. The housing market is influenced by a complex interplay of supply and demand, interest rates, government interventions, and broader economic conditions. Those looking to enter the market must carefully assess their financial situation and remain aware of policy changes that could impact affordability and investment opportunities.

In the broader economic context, inflation remains a key concern, with potential ramifications for interest rates, consumer spending, and overall economic growth. The ability of the Bank of Canada to manage inflation effectively will have significant consequences for businesses and households alike. As economic conditions evolve, staying informed and adaptable will be essential for navigating the challenges and opportunities ahead.

Ultimately, these discussions highlight the need for a balanced approach to policymaking—one that considers both short-term relief and long-term sustainability. By fostering a well-informed public and encouraging constructive dialogue, Canadians can contribute to the ongoing conversation about economic and housing policies, ensuring that future decisions are guided by both data and real-world experiences. Engaging with these discussions, sharing insights, and staying proactive in financial planning will be key to navigating the evolving economic landscape.

As Ontarians prepare to cast their votes in the 2025 provincial election, housing affordability and availability remain top concerns. The Ontario Real Estate Association (OREA) has released its Election Report Card, evaluating the housing platforms of the four major political parties. This report assesses each party’s commitments against OREA’s recommended strategies to address the ongoing housing crisis in the province.

OREA’s Housing Vision: A Home for Everyone

OREA’s A Home for Everyone plan focuses on three fundamental priorities aimed at tackling Ontario’s housing supply and affordability crisis:

1. Increasing Housing Supply

• Ending exclusionary zoning to permit up to four units per lot across the province.

• Increasing density near transit corridors through zoning modernization and converting commercial spaces into residential units.

• Encouraging modular housing as an efficient and scalable solution to boost housing supply rapidly.

2. Lowering the Cost of Homeownership

Reducing or capping municipal development charges to make housing more affordable.

• Allowing easier severance and sale of multiplex properties by creating a framework for conversion into condominiums.

• Introducing incentives for first-time buyers and new pathways for innovative homeownership models.

3. Improving Consumer Protections

• Strengthening the Landlord and Tenant Board (LTB) by reducing backlogs and restoring in-person hearings.

• Eliminating the auctioneer exemption to establish a single standard for real estate transaction oversight.

• Enhancing professional education for Realtors to ensure better consumer service and protection.

OREA’s Election Report Card: Evaluating Party Platforms

OREA gathered information from the four major parties through a survey and analyzed their housing platforms based on their responses and published policies. The New Democratic Party (NDP) and Ontario Liberals provided completed surveys, while the Progressive Conservative Party (PC) submitted a written response. Here’s how each party aligns with OREA’s vision:

Progressive Conservative Party of Ontario (PC)

The PC party’s housing platform includes initiatives to encourage modular housing through the development of housing innovation guides. These guides aim to help consumers navigate the complexities of building processes and financing options. According to OREA, this proposal supports their recommendation to promote and scale innovative housing solutions to address supply shortages.

Ontario New Democratic Party (NDP)

The NDP proposes a significant increase in affordable housing supply, legalization of fourplexes, and greater density around transit hubs. Their platform also supports:

• Eliminating the auctioneer exemption to enhance real estate transaction oversight.

• Restoring in-person hearings at the LTB to improve tenant and landlord dispute resolutions.

• Establishing a framework for innovative co-ownership models, making it easier for multiple buyers to invest in housing together.

Ontario Liberal Party

The Ontario Liberal Party prioritizes affordability by proposing to end development charges on new homes under 3,000 square feet and eliminate the provincial land transfer tax for:

• First-time homebuyers

• Seniors looking to downsize

• Non-profit homebuilders

OREA notes that these proposals align with their recommendation to lower the cost of homeownership, making home purchases more attainable for more Ontarians.

Green Party of Ontario

The Green Party has committed to building two million new homes over the next decade by legalizing fourplexes across Ontario. This policy is in line with OREA’s stance on ending exclusionary zoning by allowing up to four units per lot as-of-right across the province.

Housing and the 2025 Election: What’s at Stake?

As Ontario’s housing market continues to face supply shortages, rising prices, and affordability challenges, OREA’s evaluation underscores the urgency for political action. OREA President Rick Kedzior emphasized in a press release that housing is a key issue for voters, stating:

“Whether they are voting PC, NDP, Liberal, or Green, Ontarians want leaders who are willing to help people achieve the dream of homeownership, obtain more affordable housing, and break down barriers that prevent them from finding a great place to call home.”

With the election set for February 27, 2025, Ontarians will soon have the opportunity to decide which party’s vision best aligns with their housing needs. The policies put forward by each party will play a crucial role in shaping the province’s real estate market for years to come.

Introduction

Selling your home is a major financial decision, and maximizing your profit while minimizing costs is crucial. One way to cut expenses is by hiring a low commission real estate agent. These agents charge lower fees than traditional ones, but does that mean sacrificing quality service?

This blog explores the advantages and drawbacks of working with low commission agents, compares them to traditional agents, and helps determine if they’re the right choice for your home sale.

What’s the Average Real Estate Commission?

Traditional real estate commissions typically range from 4% to 6% of the home's sale price, split between the listing and buyer’s agents. However, commission structures are evolving, with some sellers negotiating fees as low as 1% to 3%. Low commission agents may offer rates from 1% to 1.5% to attract cost-conscious sellers.

What Is a Low Commission Real Estate Agent?

A low commission agent charges a reduced fee for listing services, often between 1% and 1.5%. While the savings can be substantial, lower costs may come with trade-offs in marketing, negotiation, and service quality.

Are Low Commission Real Estate Agents Reputable?

These agents must meet the same licensing and training standards as traditional agents. Many are experienced professionals, though their level of service can vary. Some excel in high-volume transactions, while others may lack the time for personalized client support.

Risks of Using a Low Commission Real Estate Agent

1. Limited Service and Support

Low commission agents often handle multiple clients at once, leading to reduced personal attention, slower responses, and minimal hands-on guidance.

2. Lower Sale Price Potential

A full-service agent markets aggressively, prices strategically, and negotiates effectively. A low commission agent may offer limited marketing, resulting in a lower final sale price.

3. Dual Agency Conflicts

Some low commission agents act as dual agents, representing both the buyer and seller, which can lead to conflicts of interest.

4. Reduced Marketing Exposure

Traditional agents invest in professional photos, virtual tours, and targeted advertising. A discount agent may cut corners, limiting buyer interest and possibly affecting your final sale price.

5. Fewer Showings Due to Buyer Agent Commission Cuts

Agents may be less inclined to show homes that offer reduced buyer’s agent commissions, reducing potential offers.

6. Higher Risk of Sale Falling Through

With multiple clients to manage, low commission agents may be less responsive in critical deal negotiations, inspections, or repair requests.

Alternative Home Sale Options

1. For Sale By Owner (FSBO)

Selling your home yourself eliminates agent fees but requires significant effort. FSBO homes often sell for less and take longer to close.

2. Cash Buyers and iBuyer Services

Companies that buy homes for cash offer quick sales, but often below market value. This option suits those prioritizing speed over profit.

3. Traditional Full-Service Real Estate Agent

Full-service agents provide expert pricing strategies, broad market exposure, and strong negotiation skills, typically leading to a higher final sale price.

What Can You Expect from a Traditional Real Estate Agent?

A full-service agent provides:

• Professional marketing (high-quality photos, virtual tours, and staging)

• Competitive pricing strategies

• A broad buyer network and targeted advertising

• Skilled negotiation for higher profits

• End-to-end transaction management

How to Check If a Low Commission Agent Is Reputable

• Research Reviews and Testimonials: Look for online feedback from past clients.

• Verify Licensing and Credentials: Check your state’s real estate board.

• Ask About Services and Marketing: Ensure their offerings align with your expectations.

• Review Their Track Record: Ask about past sales and average time on market.

Conclusion: Should You Use a Low Commission Real Estate Agent?

A low commission agent may be a smart choice if you’re selling in a hot market, have a highly desirable home, and are comfortable with a hands-off approach. However, if maximizing your home’s sale price and receiving full-service support is a priority, a traditional agent is often the better investment.

Before deciding, weigh the savings against the potential risks. If service quality, negotiation expertise, and strong marketing matter to you, a full-service agent may offer the best return on investment.