A key segment of Canada’s first-time homebuyer market appears to be delaying its purchasing plans.  A new survey by real estate giant Royal LePage suggests renters are holding back, waiting for further price declines.

The survey finds that 40% of renters, who considered buying before signing or renewing their current lease, are waiting for property prices to drop.  Another 29% are waiting for further interest rate reductions and 28% say they are continuing to rent while they save for a down payment.

The market has become more buyer friendly (prices are off their peaks, interest rates are down and supply is up) but affordability is a primary concern for renters.  Across Canada, 15% of tenants say they spend more than half of their net income on rent.  More than half of renters (53%) believe their income will not allow them to buy in their preferred neighbourhood.

Beyond the financial concerns, nearly a third of renters (31%) say they have no intention of buying.  Of that group, 40% say renting is more affordable, and another 40% simply do not want the responsibilities associated with homeownership.

At the same time rental costs, while still high, have been moderating.  One national analysis shows, average rent for a one-bedroom unit declined 3.6% year over year to $1,857 in May 2025.  Two-bedroom rents fell 4.6% to $2,225.

The survey suggests the desire for ownership remains strong with 54% of renters saying they intend to buy a home “in the future”.  Sixteen percent expect to make the move within the next two years, 21% are looking to buy in two to five years.

This article was published by the First National Financial Marketing Team.

Short-term vacation rental platform Airbnb said Friday that “thousands” of reservations in British Columbia are at risk of cancellation, accusing the province of rushing out regulations as it cracked down on the industry.

Alex Howell, Airbnb’s Canadian policy lead, said in an interview that the rules requiring short-term rental hosts to confirm their listings are legal under the changes have already led to some bookings being cancelled.

The government has said platforms such as Airbnb can’t post B.C. listings without confirming their registration with the province, but Howell said many hosts whose properties qualify can’t register due to glitches and other problems with the new system.

“Typically, we would have worked with a government for six months to do live testing, to make sure that things are working the way they should,” Howell said.

“And unfortunately in this situation, B.C. really just rushed into launching the system that hadn’t been fully tested, and that’s what’s brought us to this situation.”

She said that property owners have reported that typos and formatting errors have prevented them from registering with the province, despite meeting all the legal criteria for hosting short-term rentals.

The province had said that short-term rentals are being restricted to principal residences, a secondary suite or a structure such as a laneway house on the property, and the policy is meant to open up more units in B.C.’s rental housing market.

Howell said the timing of B.C.’s latest rules on short-term rentals is especially impactful, just ahead of the busy summer tourist season.

“Thousands of reservations across the province are now at risk,” she said. “These are registered, compliant hosts that are failing validation protocols through no fault of their own.

“And this impacts … thousands of reservations across the province, at least 50 per cent of which are domestic travellers who are following their own government’s advice to support local and travel within Canada this year.”

“We think it’s irresponsible to wait until the 23rd to alert travellers that there might be an issue,” she said. “We’re trying to get them that information ahead of time so that they can make some informed decisions.”

In a statement, Housing Minister Ravi Kahlon said the province is confident that “Airbnb will find solutions to their challenges with getting listings verified ahead of the June 23 deadline.”

“We hope that Airbnb will choose to support their hosts in verifying their listings, instead of cancelling their bookings,” Kahlon said. “This is new ground for B.C., and we are working through ServiceBC, our short-term rental branch, and the platforms themselves to help hosts comply with the requirements.”

The ministry also noted that there are 65 short-term rental platforms operating in B.C., and other platforms have been successful in supporting their hosts to get registered.

In a separate statement, the Opposition B.C. Conservatives criticized the short-term rental policies of the New Democrat government, with Prince George-Valemount legislator Rosalyn Bird saying the regulations running counter to the province’s efforts to promote local travel.

“How do you promote staycations while sabotaging the short-term rental market that makes them possible in small towns?” Bird said in the statement. “The Premier (David Eby) says ‘travel within B.C.’, and then his government kneecaps our ability to welcome those travellers.”

This article was written for Canadian Mortgage Trends by Chuck Chiang.

With markets nearly split—pricing in a 40% chance of a rate cut and a 60% chance of a hold—the Bank of Canada’s upcoming rate decision on Wednesday is still very much up in the air.

And with fresh inflation data landing just one day before the announcement, Tuesday’s CPI report could be what ultimately tips the scales.

The central bank will announce its decision Wednesday morning, alongside a new Monetary Policy Report and revised forecasts.

While economists broadly agree that rates are headed lower over time, a cut this week is far from a sure thing as policymakers balance growing recession risks against still-sticky inflation.

Case for a cut: Tariffs, soft data, and a fragile outlook

RBC and Scotiabank both note that if not for escalating trade tensions with the U.S., the Bank likely would have held in March.

With those risks still elevated, RBC expects the BoC will “opt to add another ‘insurance’ 25-basis-point cut” to cushion against a possible downturn.

The central bank’s Q1 Business Outlook Survey revealed faltering sentiment, with hiring intentions at their lowest levels since the pandemic and one-third of firms now expecting a recession.

March’s jobs report also disappointed, showing a net loss in employment and a rising unemployment rate.

National Bank, however, sees a “temporary pause to assess” as the more likely outcome, noting that while soft indicators are weakening, hard economic data haven’t yet deteriorated in a meaningful way. Still, if current trends continue, NBC believes the next cut could come as early as the June 4 meeting.

Scotiabank’s Derek Holt, meanwhile, lays out the case for disinflation, pointing to a cooling job market, weaker commodity prices, and ongoing economic slack. It also warns that Canada could feel the ripple effects of a slowing U.S. economy, especially with trade barriers making it harder for Canadian exports to find buyers.

Case for a hold: Inflation risks and a cautious BoC

Even with the economy showing signs of strain, both Desjardins and Scotiabank say the Bank of Canada may choose to hold off on another cut—for now.

Desjardins points out that while rates are still expected to head lower, just how far they fall will depend heavily on how trade policy evolves.

“The direction of travel for interest rates is still lower, but where the policy rate troughs will be highly conditional on where trade policy settles,” Desjardins economists wrote.

Scotiabank sees persistent inflation as the bigger risk. The Bank’s preferred core inflation measures have continued to run hotter than expected—between 3.5% and 4% month-over-month on a seasonally adjusted annualized basis.

“These core measures have been persistently too hot straight back to last May,” says Holt. “Their persistence has tended to suggest that the BoC shouldn’t have been easing as much as it has to date, so it’s time to call time out.”

Tariff-related price pressures could also continue to feed into inflation in the months ahead, making the Bank even more cautious about cutting prematurely.

The takeaway

Whether the Bank cuts rates on Wednesday or not, the easing cycle appears far from over.

Markets still expect another 25 to 50 basis points of cuts this year, and many economists believe the next move could come as soon as June—especially if the incoming data continue to weaken.

As Scotiabank points out, what the Bank says about inflation, growth, and trade-related risks may be just as impactful as the rate decision itself.

BoC policy rate forecasts from the Big 6 banks

This article was written for Canadian Mortgage Trends by:

A new report says the national average asking rent in March was $2,119, marking the sixth straight month of year-over-year declines.

By Sammy Hudes

On a month-over-month basis, rents rose 1.5% from February, the first increase since last September.

Urbanation president Shaun Hildebrand said renters were more active in March than they’d been in recent months, likely thanks to improvements in affordability.

“However, rents are likely to continue facing downward pressure in the near-term due to the expected negative economic impact and job losses caused by the trade conflict with the U.S.,” he said in a press release.

The report said average asking rents in Canada are still 17.8% higher than they were five years ago when the COVID-19 pandemic hit in March 2020.

Purpose-built apartment asking rents declined 1.5% from a year ago to an average of $2,086, while asking rents for condominium apartments fell 3.8% to $2,232.

Ontario recorded the steepest rent declines, with combined apartment and condo rents falling 3.5% to an average of $2,327 in March, followed by Quebec’s 2.5 per cent decrease to $1,949.

B.C. saw a slight 0.6% decrease in average asking rents to $2,480 while Alberta’s average ask was down 0.4% to $1,721.

Saskatchewan led the way for year-over-year rent growth, at three per cent, to an average of $1,336, followed by Nova Scotia at 2.4% to $2,199 and Manitoba at two per cent to $1,592.

This report by The Canadian Press was first published April 8, 2025.

Published for Canadian Mortgage Trends by:

Canada received a temporary reprieve from U.S. tariffs for at least 30 days, but if enacted, BMO warns the Bank of Canada may be forced to cut its policy rate to 1.50% by year-end.

That would be a full 100 basis points (one percentage point) lower than BMO’s current forecast, which expects the Bank of Canada’s rate to hit 2.50% by later this year.

BMO released its updated forecast based on the implementation of U.S. tariffs—20% on most Canadian goods and 10% on oil and gas—which were originally set to take effect today. However, at the eleventh hour, President Trump announced a 30-day delay, extending a similar deal previously made with Mexico.

BMO economist Michael Gregory told Canadian Mortgage Trends that if tariffs do eventually take effect, a more aggressive rate-cutting cycle could be back on the table.

“If tariffs are actually put in place, then -150bps enters the realm of possibilities again,” he said.

This would push Canada-U.S. overnight rate spreads beyond -225 bps, approaching the “all-time extreme” set in 1997, he added.

In the meantime, however, with any action now being postponed, Gregory said the tariffs “have shifted from being an essential certainty to now being a risk.”

BoC policy rate forecasts from the Big 6 banks

Tariffs could justify emergency Bank of Canada rate action

Believing tariffs were imminent, economists at National Bank made said there was a “strong argument” for an emergency or larger-than-usual rate cut.

“To lessen the fallout on Canada’s real economy and to simultaneously buttress financial conditions, we believe there would be a strong argument for an emergency or inter-meeting interest rate cut by the BoC,” they wrote, pointing out that a policy rate of 3% is still in the upper half of the assumed neutral range of 2.25% to 3.25%.

Beyond this immediate action, the bank also predicted that scheduled cuts in March and April, totalling 25 basis points each, could bring the policy rate down to 2.00% by spring.

Beyond affecting the Bank of Canada’s rate-cutting path, tariffs are expected to put significant pressure on the Canadian dollar and economic growth, with some warning they could push the economy into recession. Experts also highlight the risk of inflationary pressures if tariffs persist.

However, all of this remains speculative and hinges on what happens over the next 30 days.

As part of the deal to delay tariffs, Canada has pledged to step up efforts on border security and the flow of fentanyl by working closely with U.S. officials. This includes expanding its $1.3-billion border protection plan, listing cartels as terrorist organizations, and launching a new cross-border task force.

Canada is also committing an additional $200 million to fight drug trafficking and appointing a fentanyl czar to lead the charge.

This article was written for Canadian Mortgage Trends by:

Canada Mortgage and Housing Corp. says high housing costs are restricting population mobility in the country, as Canadians are finding that it’s too pricey to buy or rent in cities where they seek jobs.

The federal housing agency said its analysis shows that a one per cent increase of housing prices in a destination city leads to a corresponding one per cent decline in the number of people moving there.

Since 1990, the percentage of households in Canada moving each year — including within municipalities — has dropped from nearly 17.8% to just 10.1% in 2020.

“This trend reflects many factors including population aging and technological changes, but housing costs have a role to play as well,” said CMHC deputy chief economist Aled ab Iorwerth in an online post.

He said the inability to move due to high housing costs is felt by both current workers and those new to the workforce, which limits skill development and reduces the economic growth of major cities.

“When choosing where to live and work, Canadians not only look at the wage increase they might get. They must be realistic about housing costs if they have to move to a new location,” ab Iorwerth wrote.

“And they may give up on opportunities given by a new job that improves their skills and knowledge — and hence the productivity of the country — if they can’t afford to cover the cost of housing after moving.”

Employers in cities with more expensive housing are subsequently forced to offer higher salaries to attract skilled workers to compensate for their cost of living, which raises business expenses and lowers productivity.

The analysis said Toronto, one of the two most expensive major cities in the country to purchase a new home, could boost its population by three per cent if it doubled its housing starts over the next decade.

Ab Iorwerth said that while many attribute the lack of affordability in Toronto and Vancouver to their growing populations, data shows Calgary and Edmonton have remained relatively more affordable despite faster population growth over the past two decades.

“The reason for this is that more housing supply keeps house prices under control relative to income, which in turn attracts people,” he wrote.

“Population growth can be accommodated if there is sufficient housing supply. In contrast, if there is insufficient housing supply then more people arriving in a city will lead to higher house prices limiting growth of the city.”

This report by The Canadian Press was first published Jan. 30, 2025, and found on Canadian Mortgage Trends.

Former Scotiabank Mortgage head John Webster weighed in, noting that the big banks’ competitive pricing is unsustainable and unlikely to continue for long.

A mortgage rate war is expected to intensify, with more than half of all mortgages held by Canadian banks set to renew over the next two years, says an RBC analyst.

With interest rates now down from peak levels, mortgage shoppers—especially those with mortgages locked in at historically low rates—will have a “strong incentive” to shop around for better deals, creating intense competition among lenders, RBC analyst Darko Mihelic wrote in a recent research note.

“In today’s market, lower mortgage rates will make a significant difference for Canadians whose mortgages were originated at all-time low interest rates,” he noted. “For a mortgage that was taken out in June 2020, a 50-basis-point impact in the renewal rate would result in annual savings of about $1,000.”

He adds that this will likely prompt mortgage brokers to “actively mine” their databases and preemptively reach out to clients to help them find more attractive renewal terms.

Mihelic points out that TD Bank, facing restrictions on its U.S. expansion, may turn its focus toward Canadian mortgage renewals in an effort to meet its financial targets. This could push other major players to sharpen their competitive edge.

“All Canadian banks view mortgages as a significant anchor product and, currently, loan growth across multiple loan categories is very low,” Mihelic said. “The chance to grab market share from a competitor is significant.”

A competitive challenge for brokers

Many brokers have pointed out that it’s becoming increasingly difficult to compete with the Big Banks, especially given their unusually aggressive mortgage rate pricing.

At a recent public appearance, John Webster, former CEO of Scotia Mortgage Authority, said there’s been a lot of “silly business” going on among the big banks as they strive to meet quarterly revenue targets. However, he added that it’s “a little bit early to say it’s solely driven by market share.”

He referenced Mihelic’s report, suggesting there’s been a “confluence of circumstances” that are driving the big banks to be more competitive on their mortgage product pricing, including TD’s recent troubles in the U.S. and CIBC having “challenges” with gaining market share.

“I don’t think that will continue,” Webster said. “I suspect in the first quarter…there will be more rationality in pricing, at least I hope so. It’s not sustainable.”

This article was written for Canadian Mortgage Trends by:

Average asking rents declined nationally on a year-over-year basis for the first time in more than three years in October, said a report out Thursday.

By Sammy Hudes

The report from Rentals.ca and Urbanation found average asking rents across Canada sat at $2,152 in October, down 1.2% from the same month in 2023 — the first national decrease since July 2021.

The decline is mainly concentrated in Canada’s major urban centres, with cities like Toronto, Vancouver, Calgary, and Montreal seeing rent decreases.

Urbanation president Shaun Hildebrand said it is rare for rents to decline year-over-year at the national level.

“This is happening as the key drivers of rent growth in recent years — a strengthening economy, quickly rising population, and worsening homeownership affordability — are beginning to reverse,” said Hildebrand.

“As a result, we can likely expect this trend for rents to continue in the near-term, particularly as apartment completions remain at record highs.”

B.C. and Ontario recorded the most significant annual rent decreases among the provinces, with the former seeing average asking rents for apartments down 3.4% to $2,549 and the latter recording a 5.7% drop to $2,350.

Rents rose 17.1% in Saskatchewan, which remained the fastest-growing province in the country in terms of asking price, after seeing 23.5% annual growth in September.

By city, Toronto recorded the largest annual decline in asking rents for apartments in October, at 9.2%, to reach an average of $2,642. Vancouver saw an 8.4% year-over-year rent decline to an average of $2,945, while Calgary apartment rents fell 4.7% to $1,995.

In Montreal, average rents were down 2.9% at $1,987. Ottawa apartment rents held steady with a 0.4% annual increase to reach $2,207.

However, Edmonton led rent growth in Canada’s largest markets as apartment rents rose 8.4% annually to an average of $1,584.

Based on the report, the average asking rent for a one-bedroom unit in Canada was $1,923 in October, down 0.8% from a year ago. The average asking price for a two-bedroom unit was $2,308, down 0.2%.

Overall, asking rents for purpose-built rental apartments in October rose 1.7% compared with a year earlier to reach an average of $2,100.

Meanwhile, condominium apartment rents, which averaged $2,265, were down 3.8%.

This report by The Canadian Press was first published Nov. 7, 2024.