Homes Shrink, Solo Renters Rise, Mortgage Shock Ahead

🏠 How Ontario Home Sizes Have Shrunk Over The Years

• In the 1950s, single-detached homes comprised 95% of new housing builds in Ontario; by 2020, condos accounted for 41% of new builds.

• The median size of single-detached houses increased from 1,317 sq ft in the 1970s to 2,383 sq ft in the 2020s, a 44% increase from the 1970s to the 1980s alone.

• The size of townhouses increased from 1,220 sq ft in the 1970s to 1,640 sq ft in the 2020s, a 35% increase.

• The median condo size decreased by 32%, from 965 sq ft in the 1970s to 658 sq ft in the 2020s.

Why This Matters: Single-family homes in Ontario have grown significantly in size and price, making them increasingly out of reach for many buyers. As a result, condos have become the new entry-level housing option, but their sizes have shrunk by 32% since the 1970s, offering less livable space. Despite their smaller footprint, condo prices have continued to rise, reflecting the affordability challenges in today’s market.

📝 B.C. Targets Flipping with New 20% Tax in 2025

• B.C.’s new home-flipping tax takes effect on January 1, 2025, with a maximum rate of 20%.

• The tax applies to non-exempt sellers who flip properties within two years of purchase.

• Exemptions include cases of divorce, job loss, or household changes.

• About 4,000 properties are expected to be affected annually, with tax revenue funding affordable housing programs.

• A new annual rent increase cap of 3% begins January 1, down from 2024’s cap of 3.5%.

Why This Matters: The home-flipping tax may deter speculative investments and short-term property turnover. Tighter rent caps may impact landlords' returns but provide stability for tenants.

(source) 

👴One in Three Solo Renters in Canada is 65+

• 4.4 million Canadians lived alone in 2021, double the number from 1991.

• Solo renters now represent 50.4% of Canada’s one-person households.

• Canadians 65+ make up one-third of the solo rental market, with 710,500 renting alone.

• Millennials (25–34) account for 18.5% of solo renters, nearly matched by 55–64-year-olds at 18.2%.

• One-third of Canada’s 3.7 million divorcees are aged 55–64, contributing to solo rental growth.

Why This Matters: Renting alone is becoming more common as homeownership becomes financially unattainable for many. Birthrates and marriage rates continue to decline, leading to an increase in solo living in specific demographics. However, renting alone offers older Canadians a low-maintenance lifestyle with reduced responsibilities compared to homeownership.

💸Mortgage Payment Shock Could Hit Over 1 Million Canadians

• 1.2 million Canadians will face mortgage renewals in 2025.

• 85% of these loans were contracted when the Bank of Canada's interest rate was at or below 1%

• Mortgage holders may face a 30% increase in payments upon renewal.

• Mortgage delinquencies are increasing, with 0.192% of Canadian homeowners late on payments as of Q2 2024.

Why This Matters: Banks are expected to compete for the mortgage business, aggressively undercutting rates. Homeowners should research or use mortgage brokers to find the best deals. Investors may want to watch for increased foreclosures or short sales, especially in areas like Toronto, where arrears are rising.

🛑 Canada Tightens Real Estate Fraud Regulations

• According to the Finance Department, Canadian real estate mortgage fraud and money laundering are worsening.

• The Proceeds of Crime and Terrorist Financing Act's new rules, which take effect on October 1, 2025, target realtors and title insurers.

• Title insurers will be required to verify clients' names, dates of birth, and addresses.

• Realtors will also be required to identify unrepresented parties or face fines of up to $500,000.

• Though not mandatory, Title insurance is involved in most residential real estate transactions due to lender requirements.

Why This Matters: Regulatory changes might increase transaction costs, particularly for unrepresented buyers. Investors should prepare for potential scrutiny and documentation requirements tied to property purchases.
(source) 

🤔 WTF of The Week

New record high for average days on the market: In December 2024, GTA condos averaged 82 days on the market, a record high, signaling sluggish demand.

Prolonged sales timelines suggest a buyer's market, with increased inventory and pricing pressure on sellers.

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