Why This Competition Could Benefit Canadians

For Canadian homeowners, particularly those renewing their mortgages, this heightened competition could lead to significant advantages:

1. Lower Mortgage Rates: Banks are already offering discounted rates on renewals, with automatic renewal letters showcasing rates below posted figures. This trend is likely to intensify as competition heats up.

2. More Financial Awareness: Borrowers are increasingly scrutinizing their options. Armed with knowledge, homeowners may find themselves in a stronger position to negotiate favourable terms.

3. Longer-Term Security: With banks aiming to lock in customers ahead of open banking, long-term fixed-rate mortgages could become more attractive and affordable.

Which Banks Are Positioned to Win?

RBC's report suggests that banks with large mortgage books and strong deposit bases are best equipped to thrive in this environment. However, others face potential challenges:

• Winners: Banks with robust financial reserves and strategic renewal plans could secure market share while maintaining profitability.

• At Risk: BMO, Scotiabank, and CIBC might face greater challenges, including losing customers and grappling with thinner mortgage spreads.

What Should Borrowers Do?

With the market shifting, Canadians can take proactive steps to benefit from the upcoming mortgage competition:

• Shop Around: Don’t settle for the first renewal offer. Compare rates across lenders to find the best deal.

• Leverage Brokers: Mortgage brokers are likely to be more assertive in this competitive climate, which could work in borrowers’ favour.

• Consider Fixed-Term Rates: As banks aim to secure longer commitments, fixed-term mortgages might come with competitive rates and added stability.

The Bottom Line

For Canadians, the potential "mortgage war" represents a golden opportunity to secure better rates and terms. With banks jostling for position and innovation like open banking on the horizon, the power dynamics in the mortgage market are shifting. Whether you're renewing your mortgage or exploring new options, staying informed and proactive could pay off in a big way.

The holidays often slow down real estate markets, making it seem like December is not the ideal time to buy or sell a home. However, despite the colder weather and the festive distractions, there are compelling reasons why December could be the perfect month to make your move in the real estate world.

Why December is a Good Time to Buy or Sell

According to Charles Jaque, president and CEO of RDS Brokerage, December offers sellers the opportunity to stand out. With fewer listings and less competition, homes have a better chance of catching the attention of serious buyers. “December tends to be the lowest month for new listings in Toronto, and this trend is seen nationwide,” Jaque explains.

Adrienne Lake, managing broker of Corcoran Horizon Realty, also points out that the lower inventory creates an environment where homes can shine more brightly against the competition. This is especially true if you're selling a property that has no direct competitors in the area, such as a unique condo or a one-of-a-kind home.

However, Jaque advises sellers to manage their expectations, as December pricing is often lower than other months. His research shows that prices in the Greater Toronto Area are among the lowest in December, making it crucial to review market trends and comparables before listing.

Why This December Could Be Busier Than Usual

This year, December’s real estate market is shaping up to be busier than usual due to upcoming changes in federal mortgage rules, set to take effect on December 15. Many buyers and sellers are trying to navigate the market before these changes take place. In fact, November saw an uptick in sales in major cities like Toronto and Vancouver, and many Realtors are noticing a late-season rush of listings as sellers prepare for the spring market while buyers seek to take advantage of favourable conditions.

Benefits for Buyers

For buyers, the holiday season provides an opportunity for a smoother, less competitive home-buying experience. With fewer buyers in the market, there’s a reduced likelihood of bidding wars. Plus, homes listed during this time tend to be sold by motivated sellers, making it easier for buyers to negotiate deals.

Jaque notes that many sellers who list in December must do so for personal reasons, which can create a great chance for buyers to secure a property at a competitive price. Additionally, interest rates are lower and expected to decrease further before June, which could make this a prime time to purchase before rates rise again.

How to Stand Out and Boost Your Performance During the Holidays

1. Decorate, but Don’t Overdo It
If you’re listing a property, keep the holiday decorations tasteful and welcoming. While cozying up a space with some holiday cheer can help, avoid overwhelming potential buyers with overly festive displays that might alienate those who don’t celebrate. The key is to create an inviting atmosphere that appeals to a wide range of people.

2. Client Appreciation Events
Host small client events like a holiday cocktail hour or brunch to stay connected with past clients and build relationships with potential leads. This can be a great way to keep your name top-of-mind while spreading some holiday cheer.

3. Unique Open Houses
Get creative with your open houses by adding festive touches like a visit from Santa Claus, photos with pets, or holiday-themed treats like hot chocolate and cookies. A branded event that stands out from the usual offerings will draw in more visitors.

4. Collaborate and Engage with the Community
Partner with other agents in your area for joint open houses or community events. From toy drives to holiday competitions, showing that you care about your local community can help set your listings apart. Jaque suggests activities like gingerbread house-making contests or charity initiatives to build relationships and strengthen your ties with potential clients.

5. Personal Touches Go a Long Way
Reach out to your clients with personal holiday cards or small gifts to show you care. This simple gesture can keep the lines of communication open and remind them that you are thinking of them. It’s not just about sales; it’s about nurturing long-term relationships.

Consistency Is Key: Think Year-Round

Jaque emphasizes that success in real estate is not about short bursts of activity around the holidays but about year-round consistency. By staying engaged with your clients throughout the year, whether through personalized messages or regular check-ins, you’ll build a stronger foundation for success.

Use Technology to Stay Organized
Both Jaque and Lake agree that successful agents use systems to stay organized and keep track of relationships with clients. Using CRM software and making sure to touch base regularly is crucial for building a sustainable business. While the holiday season is a great time for extra marketing, these efforts should be part of a broader, ongoing strategy.

Take Advantage of the Quiet Market

The quieter December market offers a unique opportunity for agents to put in the work that many others might neglect. By taking advantage of the slower season to establish stronger relationships with clients, plan creative marketing strategies, and stay consistent with outreach, you can set yourself up for greater success when the market picks up in the new year.

Whether you're buying, selling, or working as an agent, December might just be the best-kept secret in real estate. With a little preparation and creativity, you can make the most of the holiday season and position yourself for success in 2025.

As 2025 draws closer, over 1 million Canadian homeowners are facing a significant financial change—mortgage renewal. If you’re among the 1.2 million Canadians with a mortgage set to renew next year, this could mean higher payments and added financial pressure.

According to a recent report by the Canada Mortgage and Housing Corporation (CMHC), the majority of these mortgages were secured during a time when interest rates were at or below 1%. Now, with interest rates significantly higher, many homeowners are about to face mortgage renewals that could impact their finances.

What’s Happening with Interest Rates?

The Bank of Canada (BoC) has made several adjustments to its key interest rate throughout 2024, dropping it four times in an effort to manage inflation, which peaked at 8.1% in June 2022. After reducing the rate to 3.75%, many mortgage holders will soon be renewing their loans at rates much higher than they were initially accustomed to.

While the current rates are lower than the 5% level seen for much of 2023, they still pale in comparison to the historically low rates many Canadians locked in during the pandemic, which were as low as 0.25%.

The Impact on Homeowners

For over 1 million homeowners, this means a major increase in monthly mortgage payments. Homeowners who initially secured low-interest mortgages may now face significantly higher rates, which could increase their payments and place financial strain on household budgets.

The CMHC report also highlighted a slight increase in mortgage delinquency rates, with 0.19% of mortgages being over 90 days past due in Q2 of 2024, up from 0.14% in 2022. This may be an early indicator that many Canadians are struggling with the increased cost of borrowing, and the CMHC anticipates more delinquency in the future as mortgages are renewed at higher rates.

A Broader Economic Concern

The CMHC warns that the upcoming wave of mortgage renewals in 2025 and 2026, combined with higher interest rates, could put a strain on the Canadian economy. The national housing agency also noted that mortgage debt has been growing faster than inflation, leaving many borrowers vulnerable to financial pressure.

The situation isn’t just about higher monthly payments—it’s a broader issue that could exacerbate financial strain on Canadian families, especially if other debts like auto loans, credit cards, and lines of credit are also increasing in delinquency.

Ontario Homeowners: How Will You Be Affected?

If your Ontario home’s mortgage is up for renewal in 2025, it’s crucial to start planning ahead. The financial landscape is much different than when you first secured your loan, and you may be facing a steep increase in payments.

Do you expect to be able to handle the higher costs, or will the change be a financial challenge? How will your household budget be impacted by the higher mortgage payments? Will you need to explore refinancing options, or perhaps make cuts elsewhere in your expenses?

Your experience matters, and we want to hear from you. Share your story with us, and let’s shed light on the challenges faced by homeowners as they navigate the upcoming changes in mortgage rates.

As Canada moves into 2025, homeowners facing mortgage renewals must prepare for potentially higher payments and the financial implications that come with it. Being proactive in understanding your new rate and how it could impact your monthly finances is essential in managing the financial stress of mortgage renewal.

If you're shopping for a mortgage in Canada, you're likely searching for the best possible rates. After all, a lower mortgage rate can save you thousands of dollars over the life of your loan. But with mortgage rates constantly changing, how can you find the lowest rates and ensure you're getting the best deal?

This guide provides an up-to-date snapshot of Canada’s best mortgage rates, along with helpful tips for qualifying for the lowest rates available.

Why Mortgage Rates Matter

When you're buying a home, the interest rate on your mortgage plays a huge role in how much you’ll pay over time. A lower rate means lower monthly payments, which can free up your budget for other needs. And, if you’re borrowing a large sum, the savings can be significant over the long term.

How to Find the Best Mortgage Rates in Canada

The Canadian mortgage market is always evolving, with rates changing frequently. To help you navigate this shifting landscape, we’ve compiled a list of the best national mortgage rates available today. We also update this information daily, so bookmark this page to stay on top of the latest mortgage rate trends.

But simply finding the lowest rate isn’t always enough. There are a few other factors that will help you lock in the best possible deal.

How to Qualify for the Lowest Mortgage Rates

To get the best mortgage rate, it’s important to understand the requirements that come with qualifying for these low rates.

1. Insurance: Most of the lowest rates require mortgage insurance. This may seem counterintuitive—after all, why would putting less money down lead to a lower rate? The answer is simple: mortgage insurance acts as a safety net for lenders, which makes them more willing to offer cheaper financing. Typically, mortgages with less than a 20% down payment require insurance by law.

   Tip: If you switch lenders at the end of your mortgage term and don't increase your loan or amortization, ensure the new lender keeps your insurance active. This can help you maintain lower rates in the future.

2. Insurable Mortgages: If you can put down at least 20% of the home’s value, you may qualify for an "insurable" mortgage. These loans often come with lower rates—sometimes 10-25 basis points (bps) lower than uninsured loans. For example, a 10 bps savings could save you over $470 over five years on every $100,000 you borrow.

Key Factors for Qualifying for the Best Rates

Beyond mortgage insurance, there are a few key qualifications that lenders look for when offering the best prime rates:

• Credit Score: A good credit score (usually 720 or higher) is essential to getting the lowest rates. While some lenders may accept lower scores, this is a general benchmark.

• No Recent Missed Payments: Lenders will look at your credit history to ensure there are no recent missed payments or derogatory marks.

• Income: Lenders want to know that you can afford your mortgage. This means having a stable income (such as a job letter and pay stub) or tax documentation if you're self-employed.

• Debt-to-Income Ratio: Your monthly housing costs (including mortgage payments, property taxes, and heating costs) should be no more than 39% of your gross income. All monthly debt payments (including loans and credit cards) should be under 44% of your gross income.

• Marketable Property: The property you’re buying needs to be easily sellable if needed. Some lenders may not offer the best rates for rural or unique properties that are harder to resell.

Additional Tips for Saving on Your Mortgage

1. Switching Lenders: If your mortgage term is coming to an end, consider switching lenders. Many lenders offer competitive rates for new customers, which can be a great way to save. Be sure to review the terms carefully and confirm you’re not paying higher fees in other areas.

2. Rate Holds: Some of the best rates require you to close your mortgage within a specific time frame (often within 30 days). Make sure to check with your lender on their rate-hold policies.

3. Amortization Period: Lenders tend to offer better rates for shorter amortization periods. If you can afford higher monthly payments, choosing a shorter amortization period can reduce the total cost of your mortgage over time.

The Bottom Line

Finding the best mortgage rate in Canada isn’t just about getting the lowest advertised rate. To truly maximize your savings, it’s important to consider factors like insurance, your credit score, income, and the type of property you’re buying. By keeping these factors in mind and negotiating with lenders, you can secure the lowest possible rate and save money in the long term.

Canada’s housing market is poised for another dynamic year in 2025, as economic conditions, policy measures, and demographic shifts interact to shape market trends. According to RE/MAX’s annual housing outlook, the sector is expected to face challenges but will also present opportunities across various regions.

A Nationwide Snapshot

Modest Price Growth

The national housing market is projected to experience a modest increase in average home prices. The pace of growth will vary depending on region, but rising demand from first-time buyers and immigration will underpin price stability. Persistent supply shortages, combined with economic resilience, are expected to maintain a competitive market environment.

Inventory Constraints

One of the most pressing issues for 2025 is the shortage of housing supply. Many markets across the country are grappling with low inventory, which continues to create challenges for affordability. Governments and developers are exploring solutions, such as intensifying housing starts, reducing red tape for construction, and introducing zoning reforms, though their impacts will take time to materialize.

The Role of Immigration

With Canada targeting a record number of new permanent residents, the demand for housing is expected to increase, particularly in urban centres like Toronto, Vancouver, and Montreal. Immigration has consistently driven demand for both rental and ownership properties, adding pressure to already tight markets.

Regional Outlook

Western Canada

Western provinces like Alberta are emerging as hotbeds of housing activity. Cities such as Calgary and Edmonton are seeing strong market performance driven by economic stability in the energy sector and relatively affordable prices. Interprovincial migration to these cities is also boosting demand.

British Columbia, particularly Vancouver, remains one of the priciest regions in the country. While affordability challenges persist, demand continues to be high, driven by international immigration and local buyers seeking limited inventory.

Ontario

The Greater Toronto Area (GTA) remains a focal point for housing activity, with demand for detached homes and condos expected to stay strong. However, affordability challenges in the GTA have pushed many buyers toward suburban and rural markets, which are seeing increased interest and competition.

Cities like London, Kitchener, and Hamilton are also drawing attention as attractive alternatives due to their relative affordability compared to Toronto.

Atlantic Canada

Atlantic Canada continues to shine as a destination for buyers seeking a balance between affordability and lifestyle. Halifax, Moncton, and St. John’s are experiencing steady growth, fuelled by interprovincial migration and a rising interest in remote work options.

Key Challenges and Considerations

Rising Interest Rates

The Bank of Canada’s monetary policy remains a crucial factor. Higher interest rates have tempered buyer enthusiasm in some markets but have not fully offset the impact of low supply and high demand. Affordability remains a concern, especially for first-time buyers.

Supply and Affordability

Despite efforts to increase housing stock, addressing the entrenched supply-demand imbalance will take time. Developers face rising construction costs, labour shortages, and regulatory hurdles, all of which contribute to the slow pace of new housing availability.

Environmental and Policy Impacts

Sustainability is becoming an increasingly important consideration in housing development. Cities across the country are integrating green building practices and energy-efficient housing as part of long-term urban planning strategies.

Opportunities in 2025

While challenges persist, the Canadian housing market offers opportunities for buyers and investors alike. Regions with affordable housing, strong economic fundamentals, and population growth are expected to perform well. Strategic policy interventions aimed at addressing affordability and supply constraints could also yield positive results.

For a full breakdown of regional insights and expert commentary, view the full RE/MAX report here.

While Toronto's overall real estate market is expected to remain relatively flat in the coming year, the city's luxury sector is marching to the beat of its own drum, showing signs of growth and exclusivity. According to a recent report by RE/MAX, home prices across Toronto are predicted to stay steady into spring 2025. However, in the high-end market, the situation is markedly different, with notable increases in sales and a strong appetite for luxury homes priced over $20 million.

For prospective buyers and sellers in Toronto's prestigious neighbourhoods, like the Bridle Path, the luxury market offers opportunities that don’t align with the broader housing trends in the city. One prime example is a mansion in Bridle Path currently listed at a cool $29 million. If that's a bit outside the budget, there’s always the option to rent it for $60,000 a month.

A Glimpse into Toronto's Elite Property Market

CityNews recently toured one of Toronto's most unique and exclusive properties, a sprawling estate featuring a pool, tennis court, and a generous 17,000 square feet of living space. The property, which sold for $13 million in 2021, has since undergone an estimated $8 million in renovations. This home is designed to appeal to a very specific group of buyers—those seeking opulence, space, and privacy.

“This market caters to a very niche clientele,” explains Paige Torkan, a realtor with her husband Peter. Both are well-known figures in Toronto’s luxury real estate scene, appearing on the show Luxe Listings Canada. Paige and Peter’s expertise reflects a market where demand is high, but the customer base is small and highly discerning.

A Market with Its Own Rhythm

The broader Toronto market may be facing challenges with inventory shortages and affordability issues, but the luxury sector is less affected by these issues. RE/MAX’s report shows that, while most home prices in the city are expected to rise only marginally—by just 0.1%—the luxury market is outpacing those predictions. In fact, homes and condos priced over $4 million have seen a 4% increase in sales this year.

Peter Torkan emphasises that the luxury market operates on a different wavelength. “It has its own sort of niche trend. Buyers in this market are looking for specific needs and wants,” he says. This distinct demand is reflected in the growing number of sales above the $20 million mark. The Torkans are confident that even with the hefty $29 million price tag, the property in Bridle Path won’t stay on the market for long.

Looking Ahead: Luxury Sales on the Rise

While much of Toronto’s real estate market may be seeing flat prices, the luxury sector is an outlier, with an increasing number of high-ticket properties being bought and sold. As Toronto’s economy stabilises and interest rates ease, it’s expected that the city's luxury market will continue to thrive, attracting wealthy buyers who are less affected by the broader market’s challenges.

For sellers, this bodes well, as demand for these ultra-exclusive properties remains strong, and the luxury sector is projected to continue to follow its own trend of growth. For those curious about entering this unique part of Toronto’s real estate world, it’s clear that the path to luxury living is still wide open—but for a very specific kind of buyer.

The real estate landscape in Ontario is expected to experience notable price increases in 2025, according to the Re/Max Canada 2025 Housing Market Outlook report. After a period of heightened interest rates, the market is poised for a recovery, fuelled by a series of Bank of Canada interest rate cuts. This shift is likely to boost sales and drive up home prices across Ontario, as the market becomes more active and competitive.

Price Predictions for Ontario Cities in 2025

Across the province, Ontario’s housing market is expected to see price increases in many cities and regions. The report suggests a national average home price hike of five per cent in 2025, with some areas in Ontario seeing even higher jumps.

Here’s a breakdown of the price expectations for several key cities:

• Mississauga: The average home price in 2023 was $1,068,367, but it dipped slightly to $1,065,923 in the first half of 2024. By 2025, prices are expected to rise by six per cent to $1,129,878.

• Brampton: Home prices are predicted to increase from $1,011,915 in early 2024 to $1,072,630 by 2025.

• Durham Region: Average prices could rise from $923,521 to $969,697 by 2025.

• Hamilton: Prices are expected to climb from $810,093 to $828,320 in 2025.

• Burlington: A price increase of 4.5% is forecast, pushing the average price from $1,132,823 to $1,183,800.

• Toronto: Despite a shortage of affordable housing, Toronto will see a slight price increase of just 0.1%, largely due to low inventory.

Other regions across Ontario will also see various price increases:

• Niagara: +2%

• Hamilton: +2.3%

• Ottawa: +2.5%

• Sault Ste. Marie, Thunder Bay, Muskoka, and Haliburton: +3%

• Kawartha Lakes: +4%

• London and Burlington: +4.5%

• Peterborough, Sudbury, North Bay, Durham, Kingston, York Region: +5%

• Kitchener-Waterloo, Mississauga, Brampton: +6%

• Simcoe County: +10%

What’s Driving the Market?

The report highlights a shift in the market driven by recent changes in monetary policy. With the Bank of Canada reducing interest rates, prospective homebuyers are getting a much-needed reprieve from the high mortgage rates that have characterised the past few years. This, combined with changes to the mortgage stress test, is expected to boost market activity, particularly among first-time homebuyers.

First-time buyers are showing increased confidence, with a Leger survey commissioned by Re/Max Canada finding that 81% of regions expect this demographic to be the main driver of housing demand in 2025. Additionally, 47% of Canadians are prioritising homes in areas less likely to be impacted by climate change, indicating a shift toward sustainability in homebuying decisions.

Sellers’ Markets and Housing Shortages

The Re/Max report also anticipates that 44 regions across Canada will become sellers’ markets, meaning that demand for homes will outstrip supply. In these markets, homes typically sell quickly, and prices tend to rise as buyers compete for limited inventory.

Ontario will see a mix of sellers’ and balanced markets. For instance, Sudbury, North Bay, Simcoe County, York Region, Windsor, Kenora, and Thunder Bay are expected to experience strong sellers' conditions. Meanwhile, Peterborough, Kawartha Lakes, Burlington, Hamilton, Muskoka, and Haliburton may see more buyer-friendly environments, with Niagara expected to experience both buyer’s and balanced market conditions throughout the year.

Looking Ahead

Overall, the Ontario real estate market in 2025 is set to see a period of recovery, with price increases anticipated across many cities and regions. While affordability challenges remain, the combination of interest rate cuts, a more active market, and a growing number of first-time homebuyers are likely to push prices upward. For those looking to enter the market, now may be the time to make a move, especially as inventory remains limited and competition rises.

Stay informed about local market trends to make the best decisions for your real estate journey!

The dream of owning a home in one of Canada’s major cities might be getting a bit more attainable, as the average income required to purchase a home continues to decrease. This change is primarily due to falling mortgage rates and slightly easing home prices across the country, providing some relief to potential buyers.

In fact, new data from Ratehub.ca shows that the income required to buy a home in Canada has dropped once again, as of October 2024. This decrease signals a shift towards improved affordability, although buying a home in some of Canada's largest cities still remains a significant financial challenge.

Mortgage Rate Cuts Boost Affordability

The decrease in income requirements comes as mortgage rates have steadily decreased, with the Bank of Canada reducing its key lending rate on October 23, 2024, from 4.25% to 3.75%. This adjustment made qualifying for a mortgage a little easier, as the associated stress test for buyers became less difficult to pass. The stress test uses a mortgage rate that is 2% higher than what the buyer is getting from a lender (or 5.25%, whichever is higher) to determine if they can manage rising payments should rates increase in the future.

Lower mortgage rates make it easier for buyers to pass the test, which is based on factors such as the home’s price, annual salary, and other monthly debts. The Financial Consumer Agency of Canada's Mortgage Qualifier Tool helps estimate monthly payments, factoring in things like property value, down payments, and other debts. Buyers can use this tool to see if they qualify based on recommended debt ratios—32% for gross debt service and 40% for total debt service.

A Closer Look at Key Canadian Cities

When it comes to major urban centres, the income needed to buy a home has dropped in several cities, with Vancouver, Toronto, and Hamilton seeing the most significant decreases. These cities are benefiting from relatively stable home prices and better availability of inventory, which helps prevent price increases that could outpace mortgage rate cuts.

For instance, in Vancouver, the required salary for homebuyers decreased by the largest amount for the second consecutive month, following a similar trend in Toronto. Both cities also experienced an uptick in sales activity in October, which boosted the market without causing home prices to climb.

On the other hand, Fredericton saw a surprising rise in income requirements. Despite an overall trend of easing home prices in Canada, Fredericton experienced a jump in its average home price by $16,100 from September to October, causing the required income to go up by almost $2,000.

Victoria and Fredericton were the outliers in this trend, where prices continued to climb instead of stabilizing or decreasing.

How Much Do You Need to Earn?

So, how much do you actually need to make to buy a home in Canada's biggest cities? Let’s break it down:

• Vancouver: As one of the priciest markets in Canada, homebuyers in Vancouver need to earn a significant income to afford an average home. However, recent price drops and mortgage rate cuts have provided some breathing room for potential buyers.

• Toronto: Similarly, the required salary to buy a home in Toronto remains high, but a decrease in home prices and interest rates has eased the financial burden for many buyers.

• Hamilton: This Ontario city has also seen a drop in the required income, with easing prices and mortgage rate cuts improving affordability for buyers.

• Fredericton: The only city where the income requirement has risen, Fredericton's sharp rise in home prices has made it more difficult to qualify for a mortgage, even as prices drop in other areas.

The Bottom Line

While affordability is improving in several Canadian cities due to lower mortgage rates, buying a home is still a challenge for many Canadians. However, the combination of lower mortgage rates and stabilizing prices in several key markets means that potential buyers have a better chance of affording their first home. As the Bank of Canada continues to adjust interest rates, it’s clear that these shifts could continue to provide relief to those trying to navigate the ever-changing real estate market.

For those looking to buy, it’s a good time to evaluate your financial situation, use mortgage tools to gauge your affordability, and keep an eye on the housing market trends in your desired city.

The Bank of Canada recently delivered a significant interest rate cut, lowering its benchmark rate by 50 basis points to 3.75%. While the term “oversized” has been used to describe the move, the cut is certainly welcome news for homeowners with variable-rate mortgages, as well as those nearing mortgage renewal.

The Immediate Impact on Homeowners

For homeowners with variable-rate mortgages, this rate cut means the cost of their mortgage is likely to decrease. According to mortgage expert Penelope Graham from Ratehub.ca, prime rates are expected to fall to around 5.95% at most lenders. As a result, borrowers will see a reduction in either their monthly payments or the portion of their payment dedicated to servicing the interest on the loan.

This rate cut is part of a broader effort by the Bank of Canada to address inflation, and it could have a ripple effect on the housing market. The bank’s latest monetary policy report suggests that lower rates could eventually lead to a recovery in home sales and a modest increase in home prices.

A Waiting Game for Buyers

Despite the recent rate cut, many potential homebuyers remain cautious. While some buyers are starting to take advantage of the lower interest rates, many are still holding out, hoping for further rate reductions. Graham notes that some buyers may continue to wait for another anticipated 50-basis-point cut in December before making their move.

Moreover, changes to mortgage policies set to take effect on December 15 could prompt even more activity in the market come the new year. The combination of lower interest rates and new policies could lead to a flurry of buying and selling activity, especially in early 2025.

The Housing Market's Outlook

Victor Tran, a mortgage and real estate expert at Ratesdotca, suggests that while the rate cut could encourage some buyers to enter the market, many are still reluctant to act until they feel certain the market has bottomed out. He points out that predicting the bottom of the market is nearly impossible, and potential buyers are hesitant to rush in without that clarity.

However, Tran believes that once the market begins to pick up, it could “heat up quickly,” with more buyers entering the market and sellers responding in kind. This could lead to a busy winter and a very active spring season in 2025, as buyers rush to lock in favourable rates before any further rate changes.

A “Holding Pattern” for Now

Despite the rate cuts, the Canadian Real Estate Association (CREA) has downgraded its housing market forecast for the remainder of the year. The organization had previously expected that rate cuts would lead to a gradual recovery in the housing market, but the anticipated surge in activity has not materialized yet. CREA now predicts that national home sales will remain relatively flat until spring 2025, when a sharper rebound is expected.

For the remainder of 2024, CREA forecasts that about 468,900 residential properties will change hands, a modest increase of 5.2% compared to 2023. While the housing market has been slower to respond than initially expected, CREA remains optimistic that lower interest rates will drive an increase in sales and prices in 2025. The national average home price is projected to edge up to $683,200 by the end of the year and rise to $713,375 in 2025, representing a 4.4% annual increase.

Housing Starts Show Mixed Trends

In addition to interest rates, the pace of housing construction also plays a role in shaping the housing market. The Canada Mortgage and Housing Corporation (CMHC) reports a slight decline in the six-month trend for housing starts, down 1.3% from August to September. However, in September itself, housing starts increased by 5%, driven by a rise in multi-unit and single-detached home construction in some provinces, particularly Alberta, Quebec, and the Atlantic provinces.

On the flip side, housing starts in Ontario and British Columbia have decreased, although these provinces had historically high levels of construction in 2023. Notably, Montreal has seen a strong recovery in new home construction, with a 15% increase in housing starts from January to September compared to the previous year.

Despite these regional differences, CMHC notes that the overall housing starts in Canada are still below what is needed to restore affordability, especially in urban centres.

Looking Ahead: Will the Market Heat Up?

As the year draws to a close, the Canadian housing market remains in a “holding pattern.” While the Bank of Canada’s recent interest rate cuts have provided relief for homeowners, the full impact on the market remains uncertain. Buyers are waiting for signs that the market is bottoming out, and sellers are holding off on listing properties until they see increased demand.

If the anticipated rate cuts and new mortgage policies fuel a market recovery, we could see a surge in activity in early 2025. For those thinking about buying or selling a home, it may be wise to stay informed about upcoming rate decisions and market shifts as the year progresses.

Stay tuned—2025 may be a much busier year for the Canadian housing market than many anticipate.

Life changes, and sometimes, those changes mean your home no longer fits your needs. Whether it’s a job relocation, growing your family, or downsizing after the kids have moved out, you may find yourself considering selling your home before your mortgage term is up. But before you list that “For Sale” sign, it’s essential to understand the costs and implications of breaking your mortgage contract early.

The Cost of Breaking Your Mortgage Contract

When it comes to selling your home early, the biggest factor to consider is the type of mortgage you have. The financial consequences can vary greatly depending on whether you have an open or closed mortgage.

• Open Mortgages: If you have an open mortgage, you're in luck. These types of loans allow you to sell your home without facing penalties. You can pay off the mortgage in full at any time, which includes the option to sell your property before the mortgage term ends.

• Closed Mortgages: On the other hand, if you have a closed mortgage, you will likely face penalties. The most significant of these is the pre-payment penalty, which is a fee for breaking your mortgage contract early. Depending on the terms of your mortgage, this penalty could be substantial—potentially thousands of dollars.

In addition to the pre-payment penalty, other costs may be associated with breaking your mortgage early, including:

• Administrative fees

• Appraisal fees

• Reinvestment fees

• Mortgage discharge fee (to remove the charge on your current mortgage)

If you received a cash-back incentive or a line of credit when you initially took out your mortgage, you may also be required to repay those amounts upon selling your home.

What Are Your Options for Breaking the Mortgage Contract?

If you're contemplating selling your home early, you do have some options to potentially reduce the financial burden:

1. Blend-and-Extend Option: Some mortgage lenders may offer a solution called Blend-and-Extend. This allows you to extend your mortgage term while blending the interest rates of your old and new terms. In doing so, you avoid the pre-payment penalty. However, administrative fees may still apply, and not every lender offers this option.

2. Breaking the Mortgage: If a Blend-and-Extend is not an option, breaking the mortgage contract may be your only choice. Although you might get a lower interest rate on your new home, you’ll need to factor in the pre-payment penalty and other associated fees. It’s crucial to weigh whether the benefits of breaking your contract outweigh the costs.

Pros and Cons of Selling Your Home Early

Selling your home before your mortgage term expires might sound appealing, but it’s important to carefully consider both the advantages and disadvantages:

Pros:

• Lower Interest Rates: If interest rates have dropped since you first took out your mortgage, selling your home and buying a new one may allow you to lock in a lower rate, potentially saving you money over time.

• Faster Payoff: If you’re able to secure a lower interest rate, and you continue to make the same mortgage payments, you might pay off your new mortgage faster than your old one.

Cons:

• High Pre-Payment Penalties: The fees for breaking your mortgage before the term ends can be significant. Even if you secure a lower interest rate on your new home, the pre-payment penalties and additional fees could make this option more expensive than you anticipate.

• Qualification Challenges: With the current economic conditions, there’s no guarantee that you will qualify for a new mortgage, especially if you’re downsizing or moving into a rental. It’s important to be aware of your financial situation before making any decisions.

What Does a Pre-Payment Penalty Look Like?

One of the most significant considerations when breaking your mortgage early is the pre-payment penalty. The amount varies depending on the interest rate environment and your specific mortgage terms.

• If interest rates have risen since you signed your mortgage, you could face a hefty penalty. Lenders often calculate the penalty using an Interest Rate Differential (IRD), which is the difference between your current mortgage rate and the current rate for the remaining term of your mortgage. This difference is then multiplied by your mortgage balance.

For example, if you have a $300,000 mortgage balance with a fixed interest rate of 3% on a five-year term, and there are three years left in your contract, your lender will assess the current interest rates for three-year terms and calculate the difference. This difference could result in a substantial penalty, especially if rates have increased.

If you have a variable-rate mortgage, your penalty might simply be three months of interest payments. But for fixed-rate mortgages, it could be the three-month interest or the IRD amount—whichever is greater.

How to Minimize the Penalties

There are a few strategies you can use to minimize the penalties associated with breaking your mortgage:

• Maximize Pre-Payments: Some mortgages allow you to make additional payments without penalties. By reducing your mortgage balance ahead of time, you may lower the pre-payment penalty.

• Open Mortgages: If you have an open mortgage, there’s more flexibility to sell your home early without penalties. You may also want to explore open mortgages when refinancing, as they offer greater freedom.

Important Steps Before Selling

If you are thinking about selling your home before your mortgage term ends, there are a couple of steps you should take:

1. Request a Payoff Quote: Contact your mortgage lender to get a quote for the remaining balance on your mortgage. This will give you a clear picture of what you owe.

2. Calculate Your Home Equity: Determine how much equity you have in your home. This is the difference between your home’s market value and the remaining mortgage balance, and it could impact your financial situation when selling.

Final Thoughts

Selling your home before the mortgage term ends can be an attractive option if your needs have changed. However, it’s essential to understand the costs involved, from pre-payment penalties to additional fees. Consulting with a mortgage advisor and a real estate agent will help you navigate the process and determine if selling early is the right choice for your financial situation.

Take the time to carefully evaluate your options, weigh the pros and cons, and make sure the benefits of selling outweigh the costs. By gathering all the necessary information, you can make an informed decision that aligns with your long-term goals.

Ontario’s housing market has been facing numerous challenges, from increasing demand to regulatory barriers that slow down development. But recent announcements from the Ontario Energy Board (OEB) and the provincial government signal a shift toward a more streamlined, cost-effective approach to energy infrastructure—aimed at accelerating housing projects across the province. Here’s a breakdown of these important changes and what they mean for developers, builders, and future homeowners.

OEB Proposes Changes to Support Housing Development

On November 18, 2024, the Ontario Energy Board (OEB) introduced a proposal to amend its Distribution System Code (DSC) to ease the connection process for housing developments. These amendments are designed to help developers by reducing the costs associated with connecting to Ontario’s electricity grid. Specifically, for “qualifying housing developments,” the proposed changes will extend the revenue forecast and connection forecast horizons used by electricity utilities to estimate the costs and revenue from system expansions.

Here’s what’s changing:

• The connection forecast period—the time frame utilities use to calculate potential future revenue from new developments—will increase from 5 years to 15 years.

• The revenue forecast horizon will be extended from 25 years to 40 years.

This longer time frame means that developers may be required to contribute less upfront to offset potential losses utilities expect from system expansions. By stretching the forecast period, utilities can more accurately account for future revenue, which ultimately reduces the immediate financial burden on developers.

What Does This Mean for Developers?

For developers with active projects, this change could significantly reduce the upfront costs they face when connecting new housing developments to the electricity grid. The OEB is inviting feedback on this proposal, with a public consultation deadline of December 9, 2024.

Once finalized, the changes will apply retroactively to any development where an Offer to Connect has not yet been accepted (as of November 18, 2024). Developers who have received an offer but not yet accepted it are encouraged to reach out to their utility providers to request that the new 15-year connection horizon and 40-year revenue horizon be applied to their project.

To take advantage of this, developers should formally request that their utility re-calculate the economic model for their development, using the updated forecast horizons. If the connection horizon is expected to be less than five years, developers can request a 40-year revenue horizon but may not need to ask for a longer connection period.

The Bigger Picture: The Government’s Pro-Growth Energy Strategy

These amendments are part of a broader provincial strategy to reduce barriers to housing development and create a more affordable, efficient energy system. Earlier in June 2024, the Ontario Energy Minister presented a report outlining the need for regulatory changes to support housing development and economic growth. In response, the Ontario government has taken action to align the energy sector with its pro-growth agenda.

Key elements of the plan include:

• Integrated Energy Planning: The government’s Affordable Energy Act (Bill 214), which passed its second reading in November 2024, aims to streamline energy production, distribution, and consumption across the province. This will ensure that energy remains affordable and reliable as housing and businesses grow.

• Focus on Nuclear Power: The government will prioritize nuclear power as a key energy source, given its reliability, affordability, and zero-emissions benefits.

• Energy Efficiency Programs: The Ontario government plans to expand programs that help families and businesses save on energy costs while reducing carbon emissions.

• EV Infrastructure: As electric vehicles (EVs) become more common, the government will foster a regulatory environment that supports the expansion of EV charging stations.

• Reducing Last-Mile Connection Costs: One of the major focuses of the Affordable Energy Act is reducing the cost of last-mile electricity connections—those final links needed to connect new homes and businesses to the grid.

The goal is clear: make it easier and more affordable to build new homes, businesses, and energy-efficient infrastructure. These changes not only aim to ease the financial burden on developers but also align the energy sector with Ontario’s long-term growth plans.

What’s Next for Ontario’s Housing Developers?

The OEB’s proposed changes are an important step forward, but they are just part of a larger effort to address Ontario’s housing affordability crisis. With the provincial government working on an integrated energy plan, developers can expect to see more regulatory changes designed to reduce delays, lower costs, and streamline energy connections for new developments.

If you're a developer or builder in Ontario, here’s what you can do:

• Review the OEB’s Proposed Amendments: Familiarize yourself with the details of the proposed changes and assess how they could impact your current or future projects.

• Reach Out to Your Utility Provider: If you have an outstanding Offer to Connect, make sure to request that they apply the new, extended forecast periods to your project.

• Stay Informed: Keep up to date with the ongoing developments regarding the Affordable Energy Act and other legislative changes that could further impact energy costs and housing development timelines.

Conclusion: A Bright Future for Housing Development in Ontario

The proposed changes from the Ontario Energy Board and the broader government strategy to modernize the energy sector represent a significant shift toward faster, more affordable housing development. By addressing energy-related cost barriers, Ontario is moving closer to meeting its housing needs while supporting growth in a sustainable and cost-effective manner.

For more detailed information on how the OEB’s amendments may affect your specific project, it’s always best to consult with industry professionals and legal experts. The future of Ontario’s housing market is looking brighter, and these new energy initiatives are a key part of that promise.

The real estate market in the Greater Toronto Area (GTA) has been shifting over the past year, with homes now taking varying amounts of time to sell depending on the neighborhood. While some areas are experiencing rapid sales, others are seeing properties sit on the market much longer. If you’re curious about the latest trends, here’s a look at where homes are selling the fastest — and the slowest — across Southern Ontario.

The Changing Pace of Home Sales in the GTA

According to a recent analysis by the digital real estate platform Wahi, homes across the GTA are taking anywhere from 10 to 63 days to sell, depending on the neighborhood. On average, properties are taking 28 days to sell, which is about 9 days longer than the same period last year. However, these figures tell only part of the story, as there are some communities where homes are selling at a much quicker pace.

The GTA market is still showing signs of rebounding, but not all areas are experiencing the same level of activity. In fact, 86% of neighborhoods in the GTA are seeing slower sales compared to the previous year, but there are notable exceptions where homes are changing hands quickly.

The Fastest-Selling Homes in the GTA

If you're in the market for a home and want to know where properties are moving fastest, you’ll want to look at low-rise neighborhoods in the City of Toronto. These areas tend to have a quicker turnover compared to other parts of the region.

One standout neighborhood is Raymerville in Markham, where homes sell at lightning speed. Homes in Raymerville are moving six times faster than in some of the slower-selling neighborhoods in the region. This trend can be attributed to several factors, including pricing, the type of properties in the area, and overall demand.

Other pockets of fast-moving homes can be found in urban and suburban areas of Toronto, where demand for detached and semi-detached homes is high. Properties that are priced well and in desirable locations are still attracting competitive bids and moving quickly.

The Slowest-Selling Homes in the GTA

On the flip side, there are certain neighborhoods where homes are sitting on the market for much longer. Burlington is home to several of the slowest-selling neighborhoods in the GTA. Four out of the seven slowest-selling areas in the region are found here, particularly in neighborhoods like Freeman.

Why is this the case? Burlington has seen an increase in condo development in recent years, but many of these condos aren’t seeing the same level of demand as detached homes in other parts of the region. Additionally, areas like Tyandaga — a leafy, low-rise neighborhood with detached homes — are also experiencing longer-than-usual sale timelines.

Overall, homes in the Freeman neighborhood in Burlington take six times longer to sell on average compared to areas like Raymerville in Markham. For example, while Raymerville homes are selling in an average of 10 days, homes in Freeman can sit on the market for upwards of 60 days.

What’s Behind These Market Trends?

As Wahi’s CEO Benjy Katchen points out, the speed of a home sale is influenced by more than just overall market trends. Factors such as the type of property, its price, and the specific neighborhood can have a significant impact. Some sellers are holding out for higher prices, while others are adjusting their expectations to meet the current market conditions.

Some homeowners may choose to wait for a rebound or hold off on selling until spring, in the hopes of getting a better price. However, properties that are competitively priced and well-positioned in desirable neighborhoods tend to attract buyers quickly, even in slower market conditions.

What This Means for Buyers and Sellers

For buyers, understanding where homes are selling quickly (and where they are taking longer) can be helpful in crafting your strategy. In fast-moving neighborhoods, you may need to be prepared to act quickly and potentially make competitive offers. On the other hand, in slower markets, there could be opportunities for negotiating better prices or finding homes that haven’t garnered as much interest.

For sellers, pricing your home appropriately is more important than ever. If you're in a neighborhood where homes are taking longer to sell, consider adjusting your expectations and pricing accordingly to attract more buyers. In fast-moving areas, pricing competitively can still generate significant interest and potentially lead to quicker sales.

Final Thoughts

While the real estate market in the Greater Toronto Area is seeing varied speeds of sales, there’s still plenty of movement happening in the right areas. Whether you’re buying or selling, understanding these local trends and adjusting your strategy accordingly can make all the difference. Keep an eye on market conditions, and make sure your property is priced right to ensure a successful sale, no matter which neighborhood you’re in.