With the Bank of Canada in a rate-cutting cycle, many Canadians expect mortgage rates to continue to drop. This may be true for variable mortgage rates since they track changes in the Bank of Canada rate. However, fixed mortgage rates do not directly follow the Bank of Canada’s overnight rate. Instead, they are tied to the bond market, which has shown mixed signals recently.

Let’s break down how fixed rates are determined, where they stand historically, and why we might be near the bottom for fixed mortgage rates.

How Are Fixed Mortgage Rates Priced?

Unlike variable rates, which move in lockstep with the Bank of Canada’s rate decisions, fixed mortgage rates are driven by government bond yields. Bond yields reflect investor expectations about the economy, inflation, and future interest rates. When bond yields rise, fixed mortgage rates tend to follow suit, and when they fall, fixed mortgage rates usually decline.

Pricing in the bond market reflects market views and expectations for the future. In this sense, the bond market is ‘forward looking.’ The future expectations that are priced into current bond yields currently include the expectation of future Bank of Canada rate cuts. When the Bank of Canada cuts rates as expected, the bond market will only have a muted reaction because that expected rate cut is already ‘price-in.’ 

For example, consider the 0.50% rate cut on December 11, 2024. This was a larger than usual cut (0.25% is more common) and the second large 0.50% rate cut in a row. What did the bond market do that week?

Bond yields actually rose after the rate cut was announced. Over the past two months, bond yields have been relatively flat, despite the two large rate cuts by the Bank of Canada. Variable mortgage rates dropped 1.0% in the past two months and fixed mortgage rates remained unchanged. This demonstrates how further Bank of Canada rate cuts may not affect fixed mortgage rates at all. This lack of movement is unsurprising, as the bond market had already anticipated these cuts. When an event is fully priced in, significant shifts in bond yields are unlikely.

What Influences Bond Market Prices?

Bond market pricing reflects several factors, including:

1. Inflation concerns – core inflation remains above 2% but inflation concerns have moderated.
2. US Federal Reserve statements – the US Fed has stated they are not in a hurry to cut rates. Economic activity in the US is healthier than in Canada so they may not need rate cuts to stimulate their economy. 
3. Economic resilience – strong job reports and GDP growth in Canada and the U.S. have prompted bondholders to demand higher yields. Everyone’s forward projections are now uncertain due to the threat of a tariff war with the US​. 
4. Geopolitical uncertainty – escalating tensions in other parts of the world, especially concerning Russia and the Middle East, put upward pressure on bond yields. 
5. Government debt – continuing profligate government spending leads to increasing amounts of government debt financing. This increasing supply of government debt needs higher yields to fund if demand for the debt doesn’t match the growth in supply.

Today’s Fixed Rates Match Historical Norms

To understand today’s rates, it is helpful to look back. Fixed mortgage rates prior to the financial crisis in 2009 were regularly above 4% and often higher than 6%. At the time, this was considered normal. The financial crisis led to central banks cutting rates to lower-than-normal levels and also saw them purchasing increasing amounts of bonds to drive down bond yields. 

While this was considered to be short-term emergency activity, it has persisted. During the pandemic, rates hit historic lows due to unprecedented monetary stimulus and a demand shock. The interest rate environment during Covid does not have a historical precedent.

If we are now in a more normalized economic environment, then today’s mortgage rates are within the historical range considered normal and sustainable. We have an entire generation of borrowers who have never experienced a truly high-interest rate environment like we had in the past. But it is important to understand that the Covid low-rate environment was an anomaly. We should not expect low rates like that again.

Fixed Mortgage Rates May Not Drop Further

There are two key things for mortgage borrowers to understand when setting expectations for the future of fixed mortgage rates:

1. As explained above, fixed mortgage rates do not change with every Bank of Canada interest rate decision;
2. Several factors currently indicate that fixed mortgage rates may be at or near their bottom:

• Bond yields have held steady recently and even began to increase. 
• The economy seems to be normalizing, with inflation no longer at crisis levels and steady economic growth. The super-low rates of the Covid era are not expected in this kind of environment.
• Fixed mortgage rates are currently in the range of normal historical expectations.
• Economic forecasts are muted. The factors that would place downward pressure on bond yields are not currently present in economic forecasts.

Fixed Rate Mortgage Advice

Fixed-rate mortgages are generally preferred by risk-averse Canadian borrowers. Exposure to interest rate risk does not make sense for most mortgage borrowers. For property investors, locking in a rate takes a significant risk off the table – interest rate risk.

If you prefer a fixed-rate mortgage and are waiting for rates to drop you may be disappointed. Bond yields have risen slightly, and fixed mortgage rates may move slightly higher in the near term as well. Our expectation is that fixed mortgage rates will move around within a range over the next few months, absent a material economic or geopolitical surprise. 

Trying to time the lowest fixed mortgage rate is nearly impossible. You are better off simply looking at the rates available today and locking in a rate if it works for you and is affordable.

If you are shopping for a mortgage, consider securing a rate hold now to protect yourself against potential fixed-rate increases. A rate-hold does not commit you to anything. Rate holds are good for up to 120 days, providing you protection against rising rates while you shop for a home. They are a smart choice. If rates drop during the 120-day rate-hold period, you are not stuck with the rate on the rate-hold – you will get the lower rates available when you are ready to transact. 

Conclusion

Anticipating more rate cuts is reasonable but understanding how fixed mortgage rates are set can help you make a smart decision with your mortgage. Fixed mortgage rates have dropped by close to 1.5% in the past year. You can benefit from this normalized rate environment by locking in a fixed mortgage rate now. If you want to take advantage of future Bank of Canada rate cuts, then a variable-rate mortgage may be the right choice.

We do not anticipate fixed mortgage rates declining much further. The five-year fixed mortgage rates for rental properties are currently in the mid 4% range. Our best guess is that fixed mortgage rates for rentals will range from the low 4% range to the high 4% range in the first half of 2025. The bottom line is that fixed mortgage rates are likely near their floor. Waiting for significant drops could leave you disappointed in a market where bond yields are resisting any further decline.

For help with your mortgage decision, talk to an expert. A lot goes into your mortgage decision and an experienced mortgage broker can help you navigate today’s market dynamics.

For more insights and personalized advice, connect with Frank Mortgage! We can be found at www.frankmortgage.com or 1-888-850-1337.

Ottawa, November 29, 2024 – The Canada Mortgage and Housing Corporation (CMHC) has released its financial results for the third quarter of 2024, revealing a sustained increase in demand for multi-unit insurance products, driven largely by the continued success of its MLI Select program.

As Canada’s sole provider of mortgage loan insurance for multi-unit residential properties, CMHC facilitates access to lower borrowing costs and preferred interest rates for construction, purchase, refinance, and mortgage renewals. These efforts form a core part of CMHC’s broader mandate, which also includes delivering housing programs on behalf of the federal government.

For the three months ending September 30, 2024, CMHC insured 64,979 multi-unit residential units, marking a 26% increase from the 51,443 units insured during the same period in 2023. Of these, 29,878 were newly constructed units. Over the first nine months of 2024, CMHC insured a total of 206,157 multi-unit residential units, compared to 156,419 units during the same period in 2023, reflecting a 32% rise.

The total insured volume for the first three quarters of 2024 amounted to $47.6 billion, a 59% increase from $29.9 billion in the corresponding period last year. This growth underscores CMHC’s pivotal role in supporting the development of Canada’s rental housing stock, offering solutions that promote affordability and accessibility while integrating features for climate compatibility.

Expanded Support for Affordable Housing

As part of its broader housing initiatives, CMHC launched the Co-Op Housing Development Program (CHDP) during Q3. This program is designed to support the construction of affordable rental co-operative housing units, with a budget of $1.5 billion in loans. The program aims to fund up to 100% of eligible residential project costs and 75% of non-residential project costs, addressing affordability challenges across the country.

Michel Tremblay, Chief Financial Officer and Senior Vice-President of Corporate Services, highlighted the importance of CMHC’s efforts in tackling housing supply issues. “Facilitating the construction of purpose-built rentals remains a key factor in addressing the country’s housing supply and affordability challenges. We are pleased to see such consistent and increasing uptake in our multi-unit insurance products, which are an important factor in supporting the creation of rental supply in Canada.”

Key Financial and Operational Metrics

CMHC’s Q3 report also provided updates on capital management and the health of its mortgage insurance portfolio as of September 30, 2024:

• Mortgage insurance capital: $11.2 billion
• Capital available to minimum capital required: 191%
• Insurance-in-force: $431 billion
• Guarantees-in-force: $539 billion
• Canadian residential mortgages with CMHC insurance: 19.5%
• National mortgage arrears rate: 0.30%

Source: CMHC

The Distillery District is a key part of Toronto’s history, but now it is also where the future begins. The Goode Condos is a sleek 32-storey development that plans to offer modern urban living within the Distillery District, one of the city’s most cherished neighbourhoods. This new development will blend history, innovation, and connectivity, to stand as one of the final opportunities to own a residence in this renowned historic locale.

Prime Location at the Heart of the Distillery District

The Goode Condos’ location is a true highlight, placing residents within steps of Toronto’s celebrated Distillery District, where classic brick buildings house an eclectic mix of dining, shopping, and entertainment. A blend of cultural charm and urban convenience, this pedestrian-friendly area sets the stage for a vibrant lifestyle.

Located in Toronto’s east end, The Goode Condos offers direct access to several of the city’s most exciting and accessible destinations. Residents can step outside to explore the Distillery District, while nearby St. Lawrence Market and the Eaton Centre are both within a ten-minute walk. The future Ontario Line’s Corktown Station is a short seven-minute walk away, providing enhanced transit connectivity. For students and professionals, George Brown College’s campus is a four-minute bike ride away, and the nearby Waterfront Trail allows for scenic lakeside rides or walks within minutes of the building. Union Station and the Gardiner Expressway can both be reached within a seven-minute drive, making travel around the city and beyond exceptionally convenient.

This location ensures residents are steps away from essential services, including recreational spaces, fitness options, and pet care. Combined with its iconic setting, this unrivalled access to the city is sure to appeal to urban professionals, families, and investors looking for both lifestyle and long-term value.

A Growing East End Community

Toronto’s east end is on the brink of significant revitalization, presenting long-term potential for The Goode residents and investors alike. Major nearby developments, including the Port Lands Redevelopment, the East Harbour mixed-use community, and Quayside’s master-planned neighbourhood, promise to reshape the landscape with new greenspaces, transit connections, and economic opportunities.

The Port Lands project, scheduled for completion by 2025, will include a newly created river valley and an island called Ookwemin Minising, unlocking additional space for living, working, and recreation. As Toronto’s east-end revitalization progresses, these ambitious projects will continue to attract job growth, infrastructure improvements, and heightened demand for property. Positioned at the centre of this transformation, The Goode Condos is set to benefit from these improvements.

A Modern Take on Design and Amenities

Heritage-inspired, yet future-forward, The Goode Condos integrates modern design with its historic surroundings. The building’s sleek podium thoughtfully complements the Distillery District’s brick and cobblestone character, while the upper storeys provide unobstructed views of the city skyline and Lake Ontario. This seamless architectural balance creates a striking presence that enhances its iconic location.

The Goode Condos offers over 20,000 square feet of modern amenities designed to meet the needs of today’s urban residents. Wellness-focused features include a fully equipped fitness studio, yoga studio, and swimming pool. The social and leisure amenities include a party room, games room, rooftop terrace, sun deck, and garden lounge, offering spaces for entertaining and unwinding. Productivity is also prioritized with co-working spaces and a dedicated maker studio, catering to professionals and hobbyists alike. Pet owners will benefit from an on-site pet wash station and nearby walking trails, ensuring convenience for residents with furry companions. Additional facilities such as a concierge-attended lobby, storage rooms, laundry spaces, and a bicycle repair station enhance everyday functionality for residents.

Variety of Suites

Owning a suite at The Goode Condos is one of the final opportunities to invest or live in the Distillery District; a variety of layouts are available to accommodate different needs and lifestyles. Suites at The Goode range in size from 263 to 1,179 square feet and include layouts from studios to three-bedroom plus den configurations. Prices start at $478,000, with occupancy slated for Spring 2025. This diverse selection of homes is tailored to appeal to a range of buyers, including young professionals, growing families, and investors.

About the Developer

Graywood Developments is an award-winning real estate developer known for its commitment to quality and smart urban investments. With a keen understanding of how and where people want to live, Graywood delivers projects that blend architectural excellence, modern amenities, and lasting value. The company’s notable projects include the acclaimed Five Condos, which earned a BILD award, and Toronto’s luxurious Ritz-Carlton Hotel.

The Goode Condos will offer a rare opportunity to own a home in this historic neighbourhood. With its strategic location, mindfully designed amenities, and the ongoing growth of Toronto’s east end, The Goode combines historic charm with superior urban convenience.

For projected returns on investment (ROI) and more details about the project, you can visit Investor’s Playbook.

The City of Vancouver has published its first Annual Progress Report on its efforts to meet the provincial housing targets, marking a significant step toward addressing the region’s housing needs. Despite facing challenges such as rising interest rates, construction costs, and labour shortages, Vancouver’s development pipeline is on track to meet the provincial housing targets set for the next five years.

Progress Toward Provincial Housing Targets

Between October 1, 2023, and September 30, 2024, Vancouver completed 4,143 new housing units. This represents 80% of the year-one target set by the Province. The targets per year are:

• Year 1: 5,202
• Year 2: 10,597
• Year 3: 16,281
• Year 4: 22,349
• Year 5: 28,900

Currently, there are about 58,100 housing units in various stages of development across the city. This includes 19,300 recently approved units, 13,700 units under construction, and an additional 3,200 low-density units (such as laneways, duplexes, and multiplexes) expected to be completed within the five-year target period.

In total, Vancouver’s homebuilders are expected to deliver 33,700 units by the end of the Housing Target Order period, surpassing the provincial target of 28,900 units by a significant margin.

Collaborative Efforts to Achieve Targets

Meeting the housing targets will require a collaborative effort from all levels of government, industry stakeholders, and other sectors of the economy.

The outlook presented by the City of Vancouver aligns with recent statistics from the Canada Mortgage and Housing Corporation (CMHC), which indicate a surge in housing starts in Vancouver. Over 7,200 units were started in the past year, with more than 2,100 rental units begun in the first half of 2024. These units are expected to be completed within the next one to three years, contributing to the city’s housing goals.

Provincial Housing Targets and Vancouver’s Role

The Housing Supply Act, introduced in the spring of 2023, allows the Province to set specific housing targets for municipalities across British Columbia. Vancouver, one of the first ten municipalities to be targeted, received its Housing Target Order on September 23, 2023. The order mandates the completion of 28,900 new housing units between October 1, 2023, and September 30, 2028.

Under the Act, municipalities are required to submit annual reports on their progress. Vancouver’s first report, covering the period from October 1, 2023, to September 30, 2024, shows steady progress, despite economic and external challenges. If municipalities fail to meet their targets, the Province can take action, including appointing advisors or issuing directives for additional measures.

In addition to the provincial targets, Vancouver also set its own 10-year housing goals. In June 2024, the City approved a target of 83,000 net new units over the next decade, further reinforcing its commitment to providing a range of housing options for both new and existing residents.

Future Outlook

Looking ahead, the City of Vancouver indicated that it is confident that it will meet and exceed the provincial housing target, with substantial growth projected in the development pipeline. However, this success will depend on the continued collaboration of municipal, provincial, and federal authorities, as well as the private sector. The City stated a commitment to streamlining its approval processes and ensuring that the housing supply continues to grow at the necessary pace to meet the needs of its residents.

By the end of the five-year target period, Vancouver is projected to complete more than 33,700 housing units, ensuring that the city’s housing market remains on track to meet both current and future demand.

Breakdown of Targets

The Provincial Housing Target includes guidance on the mix of housing units, including rental versus owned, and the size and affordability of units, for a five-year period up to September 2028.

Total units: 28,900

Ownership:

• Rental units: 20,886 (72% of the total)
• Owned units: 8,015 (28% of the total)

Unit size breakdown:

• Studio and one-bedroom: 17,459 (60% of total units)
• Two bedrooms: 5,231 (18%)
• Three or more bedrooms: 6,209 (22%)

Affordability:

• Market rental: 12,992 (45% of rental units)
• Rental units affordable to low-income households: 7,894 (27% of rental units)
• Supportive rental units: 583 (2% of rental units)

The breakdowns are not mandatory, but guide the municipalities to align their housing projects with the province’s affordability and unit size goals.

Calgary’s real estate market offers unique opportunities for investors looking to start or expand a real estate portfolio. Known for its relatively affordable property prices, steady population growth, and a diversified economy, Calgary has emerged as a highly desirable market in Canada. 

Partnering with a leading Calgary investment realtor can assist investors in identifying ideal properties, both in and around the city, which align with their objectives and have good potential. 

Jesse Davies, leader of the Jesse Davies Team with Century 21, shares some of his insights on what investors need to know before starting or expanding their portfolios in Calgary.

Why Calgary?

Calgary offers a unique combination of affordability, strong economic growth, demographic factors, and other benefits, making it a prime location for real estate investment.

Regulatory Factors

The regulatory environment in Calgary offers an edge for investors. Alberta does not impose rent increase caps, allowing landlords greater flexibility to manage inflation and rising costs. Another key advantage that Calgary offers is that it has one of the lowest property tax rates among major Canadian cities, enhancing its appeal to investors.

Economic Drivers

Calgary’s economic resilience, bolstered by its energy sector, diversified industries, and growing tech ecosystem, provides a good foundation for real estate investment. 

Historically, Calgary’s economy has been heavily tied to the energy sector. While oil and gas remain important, significant diversification has taken place over the last decade, creating a more balanced and resilient economic foundation. Key sectors now include technology, renewable energy, film production, and logistics.

Calgary has emerged as the fastest-growing tech talent market in North America, securing a spot among the continent’s top 20 tech hubs. The city is also emerging as a hub for clean energy, with companies investing in hydrogen production, wind power, and carbon capture technology. These industries draw a highly skilled workforce, increasing demand for housing and office spaces alike.

Meanwhile, Calgary’s geographic location makes it an important logistics and distribution hub. Proximity to major transportation routes and the U.S. border has encouraged investment in industrial properties, including warehouses and fulfillment centers. For investors, this diversification minimizes the risks associated with energy market volatility while creating opportunities in both residential and commercial real estate.

Job Market and In-Migration

Supported by these strong economic factors, employment stability is a key driver of Calgary’s housing market. The city’s unemployment rate is currently below the national average, supported by growth in high-demand industries such as healthcare, technology, and construction. Calgary’s affordability compared to cities like Vancouver and Toronto has made it a popular destination for interprovincial migrants seeking lower housing costs and better job prospects. 

Population Dynamics

This influx of job seekers, both from within Canada and internationally, has created sustained demand for housing, especially entry-level homes and rental properties, particularly in family-oriented neighbourhoods and urban districts with strong amenities. The city experienced consistent population growth, increasing by an impressive 6.2% year-over-year in 2023, helping to provide reliable demand. Projections estimate over 1.6 million residents by 2029. 

Calgary’s young and diverse population contributes to a vibrant housing market. The city’s median age of 38 is significantly younger than the national average, and younger residents are more likely to rent. They often prioritize walkability, transit access, and proximity to employment hubs. Investors who understand these preferences can target high-demand properties in areas like Beltline, Bridgeland, and Kensington.

Demand for Diverse Housing Types

Population growth has led to rising demand for both single-family homes and multi-family properties. Alternative affordable housing options such as duplexes, townhouses, and legal secondary suites also garner ample interest. Suburban areas like Mahogany and Tuscany cater to families, while urban neighbourhoods attract professionals and students. 

This diversity of demand provides opportunities for investors to diversify their portfolios. For example, a combination of suburban single-family homes and urban condos can balance cash flow with long-term appreciation.

Neighbourhood Overview

Understanding neighbourhood dynamics is essential to developing an investment strategy and finding the right properties to fit that strategy. Partnering with local real estate agents and property managers can provide invaluable insights into market trends and tenant preferences.

Urban Hotspots

Beltline is Calgary’s cultural and entertainment hub, offering a mix of high-rise condos, trendy cafes, and nightlife. This area attracts young professionals who prioritize walkability and proximity to downtown offices. Condos in Beltline have shown consistent appreciation, while rental yields remain high due to low vacancy rates. 

Davies comments, “Condos in these urban areas offer an affordable entry point into these desirable neighbourhoods, enabling investors to capitalize on low vacancy rates for rental income and benefit from potential property appreciation.”

Bridgeland/Riverside, another urban neighbourhood, combines historic charm with modern amenities. This trendy neighborhood, and balances urban living and green spaces. Its mix of character homes and new developments appeals to both renters and buyers, making it an excellent option for investors seeking properties with renovation potential. Davies adds, “Bridgeland’s revitalized areas have boosted property values notably while encouraging a low rental vacancy rate.”

Suburban Growth Areas

The suburbs are experiencing significant growth, driven by families seeking affordable housing and access to schools, parks, and community amenities.

Mahogany, with its lakeside properties and close community atmosphere, has become one of Calgary’s fastest-growing and most sought-after neighbourhoods. The average property value in Mahogany has increased steadily, and rental properties targeting families have offered stable cash flow. Davies notes Mahogany has experienced notable year-over-year appreciation, offering promising long-term returns, especially for pre-construction investments.

Tuscany, located in northwest Calgary, provides excellent schools, transit access, and recreation. Investors can find single-family homes with good appreciation potential and steady rental demand.

Offering suburban charm while still being close to downtown, Killarney/Glengarry appeals to families and professionals. Properties here, especially older homes with renovation potential, have also shown strong appreciation, according to Davies.

Emerging Investment Areas

East Village has undergone a remarkable transformation, evolving into a unique mixed-use district with waterfront properties, cultural attractions, and pedestrian-friendly streets. Both pre-construction projects and established properties are available.

Seton, a newer community in southeast Calgary, is rapidly becoming a major employment and retail hub. With its hospital, shopping centers, and future Green Line LRT connection, Seton is poised for significant growth, making it an ideal area for long-term investments.

Calgary Initiatives and Development

Calgary has introduced several initiatives and developments; these can provide opportunities and advantages for those investing in real estate.

Infrastructure and Urban Development

Calgary’s extensive infrastructure projects are shaping and revitalizing the city’s future. For example, the Green Line LRT project will connect northern and southeastern neighbourhoods, enhancing accessibility and potentially boosting property values. Additionally, major roadway expansions, including the recently completed Calgary Ring Road, increase the desirability of suburban areas while maintaining the appeal of urban cores.

Office Conversion Initiative

Calgary’s Office Conversion Initiative is a transformative program aimed at revitalizing the downtown core by repurposing vacant office buildings into residential, educational, and mixed-use spaces.

This strategy addresses high office vacancy rates while creating new opportunities for real estate investors and developers. A centrepiece of the initiative is the conversion of 11 office buildings into residential units, adding over 1,400 homes and fostering a lively downtown community that can drive demand for property management and real estate services.

The city is also encouraging educational institutions to establish a presence downtown, transforming unused office space into academic and research facilities, which further bolsters the need for housing and infrastructure. Incentive programs, including grants covering up to 50% of demolition costs and funding for asbestos removal, enable developers to prepare prime locations for redevelopment into hotels, cultural spaces, or other uses.

Secondary Suite Incentive Program

Calgary’s Secondary Suite Incentive Program offers up to $10,000 per property owner to support the construction and registration of safe, legal secondary suites. The program focuses on funding safety upgrades like egress windows, smoke-tight barriers, interconnected smoke and carbon monoxide alarms, protected exits, and split heating systems. Additional funding is available for energy-efficient upgrades and accessibility features. Property owners must secure permits before starting construction, and funding is contingent on addressing identified safety deficiencies.

Rezoning Bylaw

Additionally, earlier this year, Calgary’s City Council approved comprehensive rezoning reforms designed to boost housing density and diversify housing options citywide. These changes permit the development of duplexes, triplexes, and fourplexes in neighbourhoods that were previously designated exclusively for single-family homes. This can create additional opportunities for investors.

Rental Market Dynamics

Calgary’s rental market remains robust, with low vacancy rates, strong demand, and favourable rental prices for landlords. Popular demographics include students, young professionals, and families, with properties near transit hubs and universities commanding higher rents.

Source: CMHC

Investment Strategies for Calgary’s Market

Pre-Construction and Development 

Investing in pre-construction properties allows investors to benefit from appreciation during the development phase. Davies notes that “Calgary’s expanding transit network and urban revitalization projects make pre-construction condos in areas like Beltline and East Village particularly attractive.”

Be sure to analyze the developer’s track record and ensure the project is in a high-demand location. Delays and cost overruns can affect profitability, so thorough due diligence is essential.

Value-Add Properties

Value-add strategies, such as renovating older properties or converting single-family homes into multi-unit rentals, can significantly boost returns. 

For this strategy, Davies suggests that “Calgary’s mature neighbourhoods, such as Mount Pleasant and Killarney, offer excellent opportunities for such projects. Also, adding a legal secondary suite, to a suitable property, is also an effective way to develop the home into an effective rental income property. These suites are particularly appealing to tenants seeking affordable housing options.”

Short-Term Rentals

Tourist-friendly areas like downtown and Kensington are ideal for short-term rental properties, according to Davies. Investors must obtain permits and comply with strict guidelines. Conducting a thorough cost-benefit analysis is essential to determine whether short-term rentals align with your investment goals.

Multi-Family Investments

Multi-family properties, such as duplexes, triplexes, and small apartment buildings, offer scalability and diversification. With Calgary’s rental market experiencing low vacancy rates and rising rents, multi-family investments have the potential to provide cash flow and long-term stability. 

Mitigating Risks

As with any investment, there are risks. Davies reminds investors, “To mitigate risks, investors should focus on well-researched neighbourhoods, diversify their portfolios, and maintain a long-term perspective. Regularly monitoring market conditions and adjusting strategies accordingly will help navigate challenges effectively.”

Calgary’s real estate market presents excellent opportunities for investors looking to maximize returns and build a diverse portfolio. From value-added properties in mature neighbourhoods to pre-construction condos in revitalized areas, strategic investments can lead to successful appreciation and consistent rental income. Partnering with a leading real estate team is key to navigating Calgary’s dynamic market and making informed decisions.

The Jesse Davies Team, recognized as one of Calgary’s top realtors, provides expert guidance tailored to your investment goals. With in-depth market insights and a proven track record, Jesse Davies and his team help investors identify high-potential properties and implement strategies to enhance their value. Whether you’re exploring urban hotspots, growing suburban communities, or other prospects, their expertise ensures you have the support needed to succeed in Calgary’s competitive market.

The Toronto Regional Real Estate Board (TRREB) recently released a report “Breaking the Backlog: Restoring Fairness and Justice to Ontario’s Landlord and Tenant Board”, providing insights on systemic inefficiencies in the Landlord and Tenant Board (LTB) and their broader implications for Ontario’s housing market. Their report calls for a series of reforms aimed at improving the LTB’s operations and restoring trust in its ability to deliver timely resolutions for landlords and tenants.

The province has taken some initial steps and is adopting a couple of the recommendations under the report. In its Fall 2024 Red Tape Reduction package, announced on November 20th, the Ontario government announced plans to implement the recommendations to permit the LTB to waive minor application errors and to streamline the process of reassigning cases when adjudicators change.

Background

Ontario’s housing crisis has been an ongoing concern; a key aspect of the issues has been the lack of affordable rental units and increasing tension between housing providers and tenants. TRREB’s President Jennifer Pearce emphasized that delays and inefficiencies at the LTB exacerbate the problem, stating, “The province is taking important steps to improve the operations of the LTB, but further action is needed. We must fix the problems at the LTB to give landlords more confidence to bring rental units to market and support tenants.”

The LTB currently faces an unprecedented backlog, with over 53,000 unresolved cases as of February 2024, according to an Ombudsman Ontario investigation. These delays leave landlords dealing with unpaid rent or damaged properties, and tenants stuck in poor housing conditions. Prolonged disputes also discourage property owners from listing rental units, exacerbating the supply shortage. 

TRREB’s report highlights the dual impact of these inefficiencies: reduced rental housing supply and diminished trust in the province’s ability to resolve disputes fairly and promptly. By addressing these systemic issues, TRREB argues, the province could unlock additional rental housing supply while fostering a more equitable environment for all stakeholders. 

TTREB’s Recommendations

TRREB’s report outlines ten recommendations to address the LTB’s operational challenges. 

1. Restoring In-Person Hearings: TRREB recommends reinstating in-person hearings as the default option, while maintaining digital hearings only when both parties agree. This would help ensure better accessibility and reduce issues caused by unreliable technology.
2. Reducing the Backlog: The report suggests creating a dedicated team focused on addressing the backlog, particularly older and urgent cases. This would streamline case resolutions and help reduce delays.
3. Improving Staffing and Training: TRREB calls for enhanced training of adjudicators to ensure they are equipped to handle a wide variety of cases efficiently. It also recommends that part-time adjudicators be assigned manageable workloads that reflect their availability.
4. Addressing Outdated Technology: The report emphasizes the need to upgrade the LTB’s outdated case management system. This upgrade would ensure that the system can handle the volume of cases without technical failures or delays.
5. Strengthening Application Processes: TRREB recommends introducing a better screening process for applications to catch minor errors before they result in unnecessary delays or case dismissals.
6. Ensuring Timely Case Resolution: The report advocates for enforcing stricter timelines for the resolution of critical cases, particularly those involving tenancy terminations. This would prevent extended uncertainty for both landlords and tenants.
7. Managing Adjudicator Terms: The report suggests streamlining the process for managing the expiration of adjudicator terms. This would avoid delays caused by case reassignment and ensure continuity in decision-making.
8. Improving Accessibility for Vulnerable Groups: TRREB recommends introducing measures such as a government-subsidized guarantor program to help renters who lack traditional credit histories or co-signers, thus improving their ability to access housing.
9. Enhancing Fairness in Renters’ Rights: The report calls for a review of discriminatory practices in the rental market, funding studies to identify and address biases, particularly those affecting marginalized groups.
10. Streamlining Adjudicator Appointments: TRREB proposes reforms to the appointment process to ensure that experienced adjudicators are retained. The process should be based on merit rather than political cycles to reduce turnover and improve consistency.

Moving Toward Solutions

TRREB’s report aligns closely with findings from the Ontario Ombudsman’s 2023 audit, which highlighted the systemic challenges affecting the LTB, including barriers to access and discrimination. To create a more equitable housing system, the report advocates for measures such as government-funded programs to combat discriminatory practices in the rental market and initiatives to support renters without traditional credit histories.

The report also emphasizes the importance of stability within the LTB’s staffing and appointment processes. Frequent turnover of adjudicators disrupts case flow, adding to delays. Establishing an independent oversight body, such as an Adjudicative Tribunals Justice Council, could help ensure continuity and expertise among LTB members.

Vacation Rental Business Development

If you are looking to invest in a vacation rental property to diversify your portfolio and earn extra income, it is important that you are prepared fully on how to manage and rent out your vacation property, so it can be a highly successful vacation rental business for you. The vacation rental industry is competitive; being well-informed is critical to compete.

Vacation Rental Business Development

Before buying holiday homes and hoping to rent them out, there are several aspects to research and business activities to conduct.

Financing

An obvious first step is to look into financing options, determining what levels of risk you are comfortable with, and examining your personal finances.

At this stage, it is also good to determine whether you are interested in a property strictly for extra money generation, or if you also want to use it as a lifestyle investment – as a place to use for your own vacations and family time, and just rent it out when you are not using it. Research and consider, too, if you are looking for a short-term rental business, which is most common for a vacation home, or if you would consider a more long-term rental.

Location

A key first decision is the planned location of vacation rental or vacation rentals. A highly desirable location is essential to attract renters to your vacation home. If you live in a tourist area, this can make buying a property close to you a possibility, but for many people, this may mean looking further afield.

Self Manage vs. Professional Vacation Rental Managers

This also raises the question of whether you can manage your vacation rental yourself. Self-management is a significant commitment, even when the property is close, but to manage a vacation rental remotely is extremely difficult, since you are not there to respond to any situations that arise.

Hiring a vacation rental property manager simplifies ownership by handling maintenance, emergencies, and urgent situations without requiring your involvement. Their expertise helps manage challenges smoothly, allowing you to enjoy the benefits of rental income without the stress.

While management fees apply, they can be cost-effective, especially if the company manages nearby properties. Property management services typically cover cleaning, maintenance, and advertising, ensuring your rental runs efficiently, but may include several other services for convenience.

Local Regulations and Taxes

Make sure to research and understand the implications of regulations and taxes for the destination you are looking at purchasing a property listing within. Some places have additional taxes for foreign investors or those with multiple properties, while others do not.

Booking Systems and Guest Communication

You will need to consider how you plan on handling the booking process; whether you will handle direct bookings, whether to invest in vacation rental management software, or go through a third party system. Be sure to consider whether you can still manage this once you start to get more bookings, and how you will handle any changes, cancellations, and other activities. Setting up your own website can be an effective way to draw customers, but it needs to look professional and be done well.

You need to be able to respond quickly to questions and guest messages, requests to book, and changes, every day of the week, and for extended hours. Online platforms will work for many of the interactions, but many guests still prefer to be able to call.

Be sure to read and respond to all reviews – even the positive reviews. You can learn from all of them, to know what you are doing right, or what could be improved, and it gives you the chance to make another personal connection with guests. This encourages return business and referrals.

Cleaning Services and Maintenance

Some new vacation property owners believe they can handle the cleaning and general maintenance themselves, but this is a major job. If cleaning and maintenance are not consistently completed to a high standard, it will ruin the guest experience and will be reflected in the guest reviews.

In addition to regular maintenance, be sure to have plans in place for any emergency repairs if needed; having a relationship with a company to handle something urgent before it happens is essential to a timely response.

Security

An essential part of managing vacation rentals is security, whether you have purchased your first property for rental, or bought additional properties to add to your investment opportunities. Burglar alarms are a must. Smart locks and other smart technology can make security simpler when a guest checks in, and can even help the checkout process since there are no physical keys to be lost. It also helps if you are trying to manage a vacation rental remotely.

Cater for a Positive Experience

Make sure you have anticipated all of the needs for a comfortable stay (without being wasteful). 

Automated systems, such as smart thermostats, keep the property comfortable without wasting energy. Also consider bed and bath linens, and all of the other items expected for a stay; the quality of these details will make a positive first impression.

Advertising

This is a big component of your vacation rental business, but it is one that many new investors do not do adequately. To get new guests, you need to get the word out. Develop your personal brand, and understand what exactly you are offering, to be able to reach the right people who would be interested.

Focus on the Future

Remember to maintain a long-term perspective, as setting up a rental business takes time. Attention to detail is necessary to set the foundation for it to thrive. Success lies in thorough preparation, efficient operations, and a commitment to creating exceptional guest experiences, which will encourage repeat bookings and positive referrals, helping your business grow sustainably over time.

Setting Up a Vacation Rental Business 

Investing in vacation rental properties offers an opportunity to diversify your portfolio, generate additional income, and potentially create a lifestyle asset. However, the vacation rental market is highly competitive, so a deep understanding of various business aspects is required to succeed. 

Strategic Business Development for Vacation Rentals

Before purchasing a vacation property, conduct thorough research to understand market dynamics, regulatory requirements, and potential financial returns. There are a few key steps to help shape your business approach.

How Will You Use the Property?

First, consider whether the property will be used solely as a rental or also serve as a personal vacation space, as this impacts mortgage options, expenses, usage schedules, tax implications, and other financial aspects. Remember that if you do decide to use the property for personal vacations, you may limit your income as it is unavailable for rent when you are using. A compromise is to only use the property during the low season or during vacancies.

Furthermore, decide between a short-term rental model, ideal for vacation homes, and a long-term approach if the local market supports extended stays, or a combination of both. This decision will affect your marketing and other strategies.

How Will You Finance Your Investment?

A solid financial plan is essential. Start by evaluating financing options, whether through traditional mortgages, investment loans, or partnerships. If you plan to have a vacation property outside of Canada, research cross border mortgage options. Carefully assess your risk tolerance, anticipated return on investment (ROI), and personal financial situation to ensure your investment aligns with both short-term cash flow needs and long-term profitability.

Where Will You Buy?

Location is perhaps the single most influential factor in a property’s success. Identify high-demand tourist regions or popular travel destinations, and research seasonal rental trends, local amenities, and nearby attractions. For local properties, proximity allows easier management. Local properties also allow you to avoid the hassles of navigating international regulations, taxation, and other requirements. On the other hand, remote and international locations can be more lucrative, with higher potential occupancy rates and rental prices. 

Ensure you understand both the positive and negative aspects of your chosen market, including demand volatility, seasonal fluctuations, and economic factors.

How Will You Manage the Property?

Effective property management is critical for smooth operations and guest satisfaction. Decide whether to manage the property yourself or hire a professional property manager.

Self-managing your vacation rental reduces the expense of hiring a property manager but requires a substantial time commitment and a hands-on approach, especially for distant properties. You must handle all aspects of guest communication, emergency repairs, cleaning schedules, and financial tracking. Remote self-management can be challenging; local partners for maintenance and guest services will be needed. 

Hiring a property management company offers expertise and convenience, particularly for absentee owners. A property manager can oversee bookings, handle emergencies, arrange cleaning and maintenance, and ensure compliance with local regulations. Though management fees apply, many investors find this approach more sustainable and cost-effective, allowing them to focus on other business interests. A good property manager can increase efficiencies and reduce vacancy periods, which can counteract the costs of the service.

Legal and Regulatory Compliance

Before purchasing a property, make sure you thoroughly understand the regulations and tax implications. The property itself, its intended use, and the location both city and country will all influence the rules you must adhere to.

Local Regulations and Zoning

Vacation rentals are often subject to strict regulations. Zoning laws, licensing requirements, and occupancy limits impact rental operations. Research local regulations regarding short-term rentals, which may include limitations on rental frequency, minimum stay requirements, and health and safety standards. For international investments, ensure you understand additional requirements for foreign owners or regulatory restrictions that may affect property use.

Tax Obligations 

Owning a vacation rental has tax implications at multiple levels. Be prepared to handle property taxes, sales taxes, and potentially income taxes if you’re renting out the property frequently. Many jurisdictions also have transient occupancy taxes for short-term rentals, similar to hotel taxes, which vary by location and often require registration.

Operational Essentials

Consider all aspects of the practical operation of your vacation rental property. From booking to cleaning, you need to have systems in place to ensure a smooth, positive experience. Even if you are using property management services, you need to know what services are – and aren’t – covered, what the systems are, and how to address any gaps.

Booking Platforms and Systems 

Choose a booking system that aligns with your business model. Direct bookings through a personal website provide full control and avoid platform fees but may limit exposure. Alternatively, using established vacation rental platforms like Airbnb or Vrbo increases visibility, simplifies payment processing, and includes guest vetting services.

Consider investing in vacation rental management software if you plan to scale up operations, as this helps manage bookings, track availability, and automate guest communication, or find a property management company that comprehensively covers this. 

A professional website can improve brand presence, but ensure it is well-designed and easy to use, as a poor user experience can discourage potential guests.

Guest Communication and Customer Service 

Guest satisfaction hinges on clear, timely communication, but it can be challenging, especially when properties are remote or in different countries. Be ready to handle inquiries and booking requests daily, ideally with rapid response times. Automated messaging systems can assist, but many guests still prefer personal interaction, especially for resolving issues or addressing special requests. Strive to create a positive guest experience by being available for questions, addressing feedback, and responding thoughtfully to reviews, both good and bad. 

Cleaning Services 

Maintaining high cleanliness standards is critical for positive reviews and repeat bookings. Professional cleaning services ensure thorough turnover between guests and allow you to focus on other tasks. Schedule regular deep cleanings and consider investing in laundry services for high-quality linens and towels.

Routine and Emergency Maintenance 

Create a proactive maintenance plan to keep the property in top condition. Schedule routine checks for HVAC, plumbing, and electrical systems, and budget for occasional replacements or upgrades. For emergency repairs, establish relationships with local service providers who can respond promptly to issues that arise during a guest’s stay. These relationships need to be established before an emergency occurs, so there are no delays in responding to them.

Security

Security is important, with guests checking in and out, especially if you are not around to keep an eye on the property. Smart locks, security cameras, and alarm systems protect both your property and guests. Smart locks also simplify key exchanges and prevent the inconvenience of lost keys, while automated security systems allow remote monitoring for peace of mind.

Marketing

To stand out in a crowded market, start by identifying your target audience and tailor your branding to their needs. Highlight features that appeal to them using high-quality visuals and engaging descriptions. 

Boost your online presence through social media, email marketing, and SEO. Be consistent across marketing channels to build a strong, cohesive brand image. Complement these efforts with partnerships, such as local tourism boards or listing sites, to maximize visibility and reach potential guests.

Guest Experience and Comfort

Tailor the experience and amenities to your target audience. However, quality bed linens, comfortable furniture, and a fully stocked kitchen offer a general appeal. Eco-friendly upgrades, such as energy-efficient appliances, low-flow faucets, and automated climate control, attract environmentally conscious travelers while managing utility costs.

Laying the Foundation

A successful vacation rental business can offer steady income and grow your portfolio growth, but this hinges on strategic financial planning, efficient management, and effective marketing. Thorough research and ample preparation to create a solid investment foundation increases the likelihood of success.

The Residential Construction Council of Ontario is challenging whether the City of Toronto has legal authority to impose green building standards on new residential construction projects.

In a nutshell, we feel they do not as the regulations are already established in the Ontario Building Code (OBC).

We have filed a legal application with the Ontario Superior Court of Justice and are seeking a mandatory order that would block the city from enforcing escalating Toronto Green Standard (TGS) performance measures that go well beyond those set out in the building code.

We want the Building Code Act enforced and an order prohibiting the city from imposing extra building regulations on planning applications because they are beyond the legal authority of the city.

A violation of the building code

The gist of the argument is that the TGS measures are being used to govern construction standards and therefore violate the spirit of the OBC.

The City of Toronto does have authority over land-use planning matters. It can impose site-specific controls over the development of land within boundaries of the city, but Toronto’s powers are subject to limitations set out in provincial statutes. 

As set out in the City of Toronto Act, the manner of construction and construction standards are not subject to site plan control because those matters are already governed by the provincial building code.

Individual municipalities do not have the authority to develop their own building regulations, especially ones that trump the provincial building code. The province moved away from this practice in 1975 when the OBC was established. The provincial regulation supersedes municipal bylaws.

City is overstepping its authority

We maintain that Toronto is overstepping the scope of its planning authority by mandating technical building measures already covered in the OBC. All it’s doing is slowing down projects and driving up costs for housing.

The OBC measures have been progressively updated and grounded in research, building science, thorough consultation as well as cost-benefit analysis.

Municipalities are not technical standards development bodies. Nor are they equipped to deal with such regulations. This is why building codes are developed at the federal and provincial level. It makes little sense for individual municipalities to stick their fingers in the pie.

Toronto adopted the TGS in 2010 to achieve more sustainable development beyond the minimum standards set out in the OBC. At first, the standards were voluntary but they are now treated as mandatory. The city is now on version 4 of the standards, with another version slated for 2026, and another in 2028.

1. The rules impose six categories of standards on development projects, with three tiers in each. The first tier is mandatory and the other two are voluntary.

The City of Toronto is not the only municipality that is breaking the rules. Nearly 30 municipalities have instituted such standards in recent years. Municipalities including Ajax, Aurora, Brampton, Caledon, East Gwillimbury, Halton Hills, King, Markham, Mississauga, Pickering, Richmond Hill, Vaughan, and Whitby have mandatory standards. Many others are not far behind.

Builders had no choice

RESCON did not want to launch this challenge. But builders had no alternative as a number of municipalities have chosen to go this route. Allowing individual municipalities to come up with their own rules, independent of the OBC, only leads to confusion, slower approvals and increased costs. 

Don’t get me wrong here. Builders want to be part of the solution to climate change. Ontario’s homebuilders are among the most sustainable in North America. Many are small business owners with families. They are as concerned about the future as anyone and want to do the right thing.

But the approach to building greener must be based on facts that have been tested and verified.

After all, this is not the Wild West.

Rules must be uniform

As has been well-documented, we are in the midst of a generational housing crisis. Recent reports indicate the future is grim. Starts are still declining and indications are that the situation will not be improving anytime soon – even with the cut in interest rates by the Bank of Canada.

In Ontario, we are are on track for 81,300 starts this year, well short of the 150,000 starts a year that are needed to reach 1.5 million homes by 2032. Alarmingly, housing starts in Ontario in the third quarter of the year declined by 16.9 per cent compared to the same period last year.

This is certainly not the time for cities to be going off-script and developing their own green building standards. It would just result in a hodge-podge of different standards across the province.  

To build more housing, we need uniform standards across the province. That way, builders will know the lay of the land. Everybody will be playing by the same rules. Green building standards that created by individual municipalities will only be inconsistent and cause problems.

Such a scenario will not do anybody any good.

Atlantic Canada’s real estate market in Q3 2024 showed varied activity across residential, rental, industrial, and office sectors. Residential sales and prices rose alongside population growth, while rental rates increased year-over-year despite slight monthly declines. Industrial markets added significant new supply, raising availability rates and average rents. In the office sector, suburban and downtown submarkets displayed differing trends in Fredericton and St. John’s.

Residential Summary for Q3 2024

Sales

Residential sales in Atlantic Canada increased by 3.7% quarter-over-quarter and 4.3% year-over-year.

Listings

New listings rose by 2.4% from Q2 2024 and 7.2% year-over-year. Active listings saw a 2.1% decrease from Q2 2024 but were up 10.1% year-over-year.

Prices

Home prices under construction saw an increase of 1.8% quarter-over-quarter and a notable 28.4% year-over-year.

Months of Inventory

The months of inventory, or the length of time it would take to sell all current listings at the current pace, decreased to 4.5 months in Q3 2024, down from 4.8 months in Q2.

Sales-to-New Listings Ratio

The sales-to-new listings ratio rose from 64.7% in Q2 2024 to 65.5% in Q3, continuing a trend favouring sellers.

Under Construction

Under-construction housing units in Atlantic Canada declined by 4.9% quarter-over-quarter from Q2 to Q3 2024 and by 7.6% year-over-year from Q3 2023 to Q3 2024.

Economic Indicators

Population Growth

The population in Atlantic Canada grew by 0.5% quarter-over-quarter and 2.0% year-over-year, contributing to the sustained demand for housing in the region.

Unemployment Rate

The unemployment rate edged slightly up from 7.6% in Q2 2024 to 7.7% in Q3 2024. This is higher than Canada’s overall unemployment rate of 6.5% as of October.

Mortgage Arrears

Mortgage arrears increased slightly from 0.26% to 0.27% quarter-over-quarter, reflecting a minor uptick in financial strain.

Rental Market for November 2024

Rentals.ca reported that in Halifax, Nova Scotia, the average rent for a one-bedroom unit reached $1,974 in November 2024. This represents a 1.2% decline compared to October but a 5.3% increase year-over-year from November 2023. Similarly, two-bedroom units averaged $2,487, showing a 1.8% decrease month-over-month but strong annual growth of 11.0%. 

Industrial Summary for Q3 2024

According to the CBRE, the Halifax industrial market delivered 410,080 square feet of new supply in Q3 2024, adding to the region’s capacity. This influx contributed to an increase in the availability rate, which climbed to 6.7%, the highest since Q3 2020. Average net asking rents rose by $0.66 from the previous quarter to reach $12.02 per square foot, indicating that demand still supports rental growth even amidst rising availability.

Office Market Summary for Q3 2024

Fredericton

The CBRE reported that net asking rents in Fredericton decreased by $0.14 quarter-over-quarter, settling at $15.40 per square foot in Q3 2024. This decline was driven by a $0.33 drop in suburban submarket rents to $15.02 per square foot, while downtown submarket rents fell by $0.03 to $15.70 per square foot.

The overall vacancy rate decreased by 40 basis points to 16.8%, with contrasting trends in submarkets. The suburban vacancy rate dropped by 120 basis points to 18.2% due to strong leasing momentum, which recorded 13,327 square feet of positive net absorption. However, the downtown submarket saw a 30-basis-point increase in vacancy to 15.6%, driven by 7,975 square feet of negative net absorption during the quarter.

St. John’s

Net asking rents in St. John’s rose to $19.58 per square foot in Q3 2024, the highest level since Q2 2022. This increase included a $0.35 rise in suburban submarket rents to $15.67 per square foot, while downtown rents declined by $0.06 to $21.58 per square foot.

Submarket performance was mixed. The suburban submarket recorded 7,950 square feet of positive net absorption, reducing the vacancy rate by 40 basis points to 14.4%. In contrast, the downtown submarket saw 7,700 square feet of negative net absorption, pushing the vacancy rate up by 50 basis points to 28.2%. Sublease availability increased significantly, reaching 8.1% of total market space, with the suburban submarket contributing the most, as sublease space there surged by 540 basis points to 20.2%.