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- Rate Cuts Incoming
Rate Cuts Incoming
Toronto condos face challenges as cancellations rise, rents hit a 17-month low, and wildfires drive up insurance costs, all while rate cuts aim to revive the market.
Today, we’re covering
🙏 January 29 Rate Cut Incoming
🔥 Wildfires May Raise Insurance Costs in Canada
😱 GTHA Sees Largest Condo Cancellations Since 2020
📉 Canadian Rents Fall to 17-Month Low
🤔 WTF of The Week
Read Time: 4 minutes
🙏 January 29 Rate Cut Incoming
The Bank of Canada is expected to cut its rate by 0.25% to 3.00% on January 29, completing a 1.75% total reduction since June 2024.
December’s inflation fell to 1.8%, helped by a temporary GST tax break; without it, inflation would have been 2.3%.
Economists predict up to three more rate cuts this year if U.S. tariffs are imposed.
Fun fact: Taylor Swift’s Canadian tour helped surge accommodation costs in B.C., adding to inflation, alongside a 3.5% rise in gas prices.
Why This Matters: Lower interest rates could make housing more affordable and boost buyers' borrowing power, potentially driving more activity in the market. A weaker Canadian dollar might also attract foreign investors, increasing demand for real estate. However, if U.S. tariffs are implemented, construction costs could climb even higher, adding more challenges for new housing developments.
🔥 Wildfires May Raise Insurance Costs in Canada
Insurable damages from severe weather events in Canada hit a record $8.5 billion in 2024, up from $6 billion in 2016.
Canada’s share of global insurance losses has risen from 2% to 4%, while the U.S. accounted for 29% of losses in 2024.
Canada's Reinsurance costs have spiked 100% in the past two years, with more increases expected.
Home insurance premiums in high-risk Canadian areas, such as B.C., Alberta, and Quebec, have risen by 5–15% annually.
Why This Matters: Properties near wildlands or urban edges may face difficulty securing affordable insurance, impacting resale and rental appeal. Investors in regions with frequent severe weather events should factor in potential insurance cost hikes in long-term budgets
😱 GTHA Sees Largest Condo Cancellations Since 2020
2,805 GTHA condo units were canceled across 14 projects in 2024, the highest since 2020.
Six canceled projects were converted to rental developments, totaling 1,434 units.
2024 recorded the lowest presales since 1996, with just 4,590 transactions.
Condo completions hit a record high of 29,800 units in 2024, a 24% increase from 2023 and 61% above the 10-year average.
2025 is projected to be another record year for completion, with 30,793 units scheduled.
Current unsold inventory levels would take 64 months to clear at 2024 sales rates, a record high.
Why This Matters: The challenges in the GTHA condo market threaten future housing supply, with a sharp decline in new construction starts potentially leading to shortages by 2026-2027. Persistent oversupply, record-high unsold inventory, and project cancellations undermine market confidence, impacting investors, developers, and economic activity tied to real estate
📉 Canadian Rents Fall to 17-Month Low
Average rent across Canada in December 2024 was $2,109, marking a 3.2% annual decrease.
This is the fifth consecutive month of rent decline.
Ontario saw the steepest rent drop, with average apartment rents decreasing by 4.7% to $2,332.
Despite the decrease, Ontario remains the second most expensive province for rent after British Columbia.
Why This Matters: An influx of condos entering the market has given renters more inventory to choose from, increasing their negotiation power and driving rents down across Canada. With over 30,000 additional condos set to close in 2025, rental supply is expected to rise further, putting pressure on landlords to offer competitive pricing.
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🤔 WTF of The Week
Canada’s immigration system is quickly becoming an international joke. With nearly 50,000 "no-show" international students and virtually no enforcement, the cracks are glaring.
Now, consider this: an estimated 5 million people could face deportation by 2026. Yet, in 2022-23, Canada managed to deport only 23,000 at a staggering cost of $111 million. Imagine the price tag for 5 million. Where's the plan?
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