CMHC gives up on goal to reduce prices to 2004 levels and the Home of the Week: Canadian real estate news for the week of June 20

This week, the CMHC has given itself a more forgiving benchmark in their plight to reduce home prices, as sales climb for the first time in months. Plus, builders are seeking to offload condos in bulk, and one property worth a look.

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Housing affordability

CMHC gives up on goal to return to 2004 housing affordability levels

The Canada Mortgage and Housing Corporation says it is no longer possible to build enough homes to bring housing affordability back to levels from over two decades ago, and will start using 2019 as a more realistic benchmark, just before the post-pandemic surge in housing costs. As Rachelle Younglai writes, in order to return to 2019 levels of affordability, the housing agency says the country must double homebuilding over the next decade to nearly 500,000 new housing units per year – which could slow or even rewind rising home costs. Previously, CMHC set 2004 as its goal because they described it as a period in recent history when housing costs were relatively low in proportion to average incomes.

Meanwhile, Canadian home sales climbed 3.6 per cent in May in the first increase since November. For the last few months – driven in part by uncertainty around U.S. tariffs – buyers have been reluctant to enter the market and supply was steadily growing. Real estate experts say it’s still too early to tell if this is the beginning of a rebound, and that we should have a clearer picture by the fall. In a recent survey, 40 per cent of renters across Canada reported that they’re choosing to wait for property prices to fall further before finally entering the housing market.

Condo costs

Seeking a bargain, investors look to bulk-buy leftover GTA condos

As the number of finished but unsold condominiums reaches new heights in the Toronto region, developers are looking to sell significant amounts of leftover inventory as investors are starting to make offers to buy in bulk. As Shane Dingman writes, many of the unsold units were initially marketed with prices higher than the current market is selling at, and builders are still trying to retain some value. That keeps the average buyer away and encourages the bulk-buyer to look for a discount. With thousands of units still under construction and planned to deliver over the next year – and little sign that prices will go up – there may be more unsold inventory yet to come.

This week’s lowest fixed and variable mortgage rates in Canada

Rates shown are the lowest available for each term/type and category (insured versus uninsured) as of market close on Thursday, June 19.

Interest on interest

What happens to mortgage rates if the Canada-U.S. trade war ends?

The United States’ chaotic trade war against Canada and much of the world has led some economists to wonder just how much the Bank of Canada would need to cut interest rates if it led to a recession – not to mention the inflationary effects. But earlier this week at the G7 summit, U.S. President Donald Trump and Prime Minister Mark Carney committed to reaching an economic and security deal within a month that would put an end to the trade spat between the two countries. Salmaan Farooqui explains how that deal could have an effect on mortgage rates.

Opinion

A rise in prenuptial agreements is a symptom of housing costs and inheritance expectations

Dating etiquette often includes a “money talk,” including incomes, debt levels and attitudes toward saving and spending. Now, add the rise of prenuptial agreements to this list. As personal finance columnist Rob Carrick writes, a rising interest in prenups can be seen as a symptom of mistrust between partners, but it could actually be linked to the rising cost of housing. The challenge of saving for a down payment has sensitized people to the risks of breaking up without a fair division of home equity, particularly when a parental gift of down payment money is involved. Lawyer Aimee Schalles, co-founder of a DIY digital prenup kit called Jointly, cited the example of a couple where one partner contributes $100,000 to the down payment and the other brings $200,000. This could be noted in the prenup, with options to split increases in equity proportionately or equally in the event of a break-up.

Home of the Week

A Toronto home, steeped in childhood memories, is redesigned into finely crafted luxury

25 North Dr., Toronto – Full gallery here

This five-bedroom home has been in the owner’s family for more than 40 years. Jordan Morassutti first moved in when he was two years old, left to attend postsecondary, and moved back in just over seven years ago with his wife and children. Mr. Morassutti even co-founded a company, North Drive, named after the home’s address. After a few renovations, the main level is framed by natural vistas and many of the rooms feature high ceilings and well-lit corridors, adding to that airy and clean art gallery feel. The lower level features a saltwater pool, a full-mirrored gym, recreation room, kitchenette and a full bathroom. The tennis court sits sheltered by mature trees about 400 feet away from the house. But the focal point of the home is undoubtedly the strikingly sculptural white staircase that runs through its core.