You’d think the housing world would quiet down by mid-December, but this week has been packed with significant developments. Inflation data showed a continued cooling trend, with November’s rate at 1.9%, marking four consecutive months below 2%. The shelter component also eased, but rents defied expectations, rising 7.7% year-over-year nationally despite sharp declines in major cities like Vancouver, where rents are down 10%. 

Rate cuts are back on the table, with the Bank of Canada expected to lower rates incrementally in early 2025, while variable-rate mortgages are regaining popularity. South of the border, the Federal Reserve cut rates by 0.25%, signaling caution amid strong GDP and persistent inflation. 

The move widened the gap between Canadian and U.S. rates to levels not seen since 1997, weakening the Canadian dollar to under $0.70 USD and highlighting diverging economic paths between the two nations.

Canada’s labor market continues to struggle, with unemployment hitting a seven-year high and job vacancies plunging to a four-year low. Companies are hiring fewer workers, creating a troubling imbalance with less than one job available for every two job seekers. 

This dynamic reflects a worsening economic downturn, with nearly 20% of unemployed Canadians classified as long-term unemployed. The construction sector, a key pillar of the workforce, faces additional challenges as housing starts have declined significantly over the year, despite a recent monthly uptick. 

Large-scale building permits, which indicate future supply, are also falling sharply, particularly in Ontario. These trends raise concerns about the future of housing affordability and employment in an already strained economy.

Compounding these issues is political upheaval, with both Finance Minister Chrystia Freeland and Housing Minister Sean Fraser stepping down. Freeland’s tenure ended amidst criticism of Canada’s record deficits, with the Fall Economic Statement revealing a $62 billion shortfall—50% over budget. 

Meanwhile, B.C.’s 2024-2025 budget projects a staggering $9.4 billion deficit, the largest in provincial history. Fraser, who oversaw record immigration levels that strained housing and healthcare systems, has faced sharp criticism for his policies’ long-term impacts. With mounting government debt, declining investor confidence, and slowing immigration, the outlook for 2025 appears unpredictable. 

This perfect storm of economic uncertainty, housing struggles, and political shakeups underscores the challenges and potential opportunities that Canada faces heading into the new year.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

[email protected]

Ryan Dash PREC

778.898.0089
[email protected]

www.thevancouverlife.com

The Bank of Canada (BoC) lowered its policy rate by 50 basis points this week, bringing it to 3.25%, the lowest level in over two years. This significant cut, which follows weaker-than-expected GDP growth and rising unemployment, has increased buying power for borrowers by 21%, enabling higher mortgage affordability. 

However, questions remain about whether these rate cuts are sufficient to revive the economy and ease challenges for mortgage holders renewing at higher rates in 2025. Despite the BoC’s confidence in achieving its 2% inflation target and avoiding a recession next year, rising insolvencies and declining consumer confidence suggest significant financial strain for many Canadians.

Economic indicators paint a concerning picture. Unemployment has risen to 6.8%, the highest in eight years outside of the pandemic, with Toronto particularly hard hit, where the jobless rate has surged by 47% year-over-year. 

Consumer and business insolvencies are climbing sharply, especially in Ontario, which saw its highest single-month insolvency filings in 14 years. Additionally, consumer confidence has experienced its steepest decline since mid-2022, casting doubt on near-term economic resilience compounded by reduced immigration forecasts, slowing housing starts, and looming risks from potential U.S. tariffs.

The housing market remains a mixed bag. Toronto sales rose 39% year-over-year in November, with prices showing a slight monthly increase, but pre-construction sales have collapsed by 84% over the past year. Nationally, arrears rates have remained stable at 0.2%, supported by significant home equity gains over the past five years. 

This equity provides homeowners with options, such as re-amortizing mortgages or downsizing, to mitigate financial pressures. Meanwhile, affordability is improving incrementally. Monthly mortgage payments for a typical Vancouver home have dropped 19% from 2023 peaks, and rental rates are also declining, signaling some relief for buyers and renters alike.

Looking ahead, the BoC is expected to implement further rate cuts in early 2025, with a potential pause to assess the economy's state. However, with unemployment rising, consumer spending weakening, and housing construction slowing, the path to recovery remains uncertain. 

While rate cuts may provide temporary relief, deeper structural challenges in Canada’s economy suggest a long road ahead.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

[email protected]

Ryan Dash PREC

778.898.0089
[email protected]

www.thevancouverlife.com

If you own a home in British Columbia, you could be sitting on an untapped financial opportunity worth seven figures. Thanks to Bill 44, homeowners now have the chance to significantly increase the value of their properties by converting single-family homes into modern multiplex developments. In this episode, we’re joined by David Babakaiff of Alair Homes, an award-winning builder and expert in multiplex construction, to help homeowners understand how they can unlock this incredible potential.

David explains how this new legislation impacts over 300,000 properties in the Lower Mainland, opening the door for homeowners to turn their lot into a wealth-generating asset. He shares real-life examples of families who have added over $1 million in equity by building duplexes, triplexes, or even larger multiplexes on their properties. Whether your goal is to sell the new units, rent them for passive income, or even live mortgage-free in a beautiful new home, the possibilities are multiple.

This episode breaks down the process step-by-step, including how to assess the feasibility of your lot, secure financing, and design a project that maximizes profit while meeting your goals. David also highlights how his team simplifies the journey, offering a seamless approach with experts in financial planning, architecture, construction, tax strategies, and real estate sales.

Your home might be worth far more than you think, and this podcast is your guide to finding out how much. Imagine transforming your property into a multi-unit building and walking away with significant financial gains—without losing ownership of your land. If you’re curious about how much money you could make with a multiplex, reach out to us today to explore your options. This is your chance to turn your property into a wealth-building powerhouse.

About David Babakaiff
David is a veteran of residential building spanning almost three decades in BC.   His companies are multi award winning, building custom homes at volume, small multifamily mixed-use buildings and multiplexes. He has been vice president of BC interior's Canadian Home Builders Association; co-founder of a $5 million VCC fund, and founder of companies in forestry logistics and industrial waste management as well as industrial alternate energy technology. In 2012 David brought Aliar Homes to Vancouver, and today David's focus is helping homeowners unlock wealth by converting their houses to multiplexes.

[email protected]

About Alair Homes
Alair began building one-of custom homes in Nanaimo and has grown to over 100 offices across North America. Today, Alair® has the largest footprint of any premium custom home building and large-scale renovation/ remodelling brand in the world.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

[email protected]

Ryan Dash PREC

778.898.0089
[email protected]

www.thevancouverlife.com

This episode delves deeply into the housing affordability crisis in Canada, a critical issue that remains at the forefront in 2024. With persistently high home prices, elevated interest rates, and a rising cost of living, homeownership is becoming increasingly unattainable for many Canadians.

The data tells a sobering story. Homeownership rates in Canada have declined from 69% in 2011 to 66% today, with younger generations facing even greater challenges. For Canadians aged 25 to 29, the homeownership rate has dropped sharply, from 44.1% in 2011 to 36.5% in 2021. This decline underscores the growing barriers to entering the housing market.

The struggles extend beyond prospective homebuyers. Developers are contending with soaring construction costs, skyrocketing municipal development fees, and high interest rates, creating a hostile environment for new projects. These challenges have led to a surge in shelved developments, land sell-offs, and insolvencies within the sector. Projects like "The Riv," a 37-story condo tower planned for Toronto, have been canceled due to insufficient buyer interest and unsustainable pre-sale thresholds. These setbacks highlight a looming crisis in housing supply that could worsen the affordability challenges Canadians already face.

Adding to the complexity, Oxford Economics projects that housing affordability will not return to reasonable levels until 2035. Their Housing Affordability Index, which evaluates factors like home prices, wages, and interest rates, reveals that homes were affordable between 2005 and 2020 but became increasingly unaffordable, peaking in 2023. While affordability has started to improve slightly, it remains far from sustainable. For many Canadians, the prospect of waiting more than a decade for improved affordability is daunting, particularly in historically expensive markets like Vancouver and Toronto.

Recent data from StatsCan challenges the narrative that home flipping significantly contributes to housing unaffordability. In British Columbia, only 3% of properties were flipped within a year in 2021, with minimal impact on overall market prices. While flipping can influence price volatility in overheated markets, its role in Canada’s broader housing crisis appears overstated. The core issue remains the chronic mismatch between housing supply and demand.

This episode also explores the November Greater Vancouver real estate statistics, offering insights into market trends. While total sales decreased by 20% month-over-month, they were up 29% year-over-year, signaling a potential shift. Inventory dropped to a seven-month low, though it remains 26% above the ten-year average. Despite elevated inventory levels, prices in some categories have remained stable or even increased, reflecting the market’s resilience.

Looking ahead, the episode discusses the Bank of Canada’s upcoming December meeting and the potential implications of a rate cut. While a reduction could stimulate an early spring market in 2025, questions persist about whether it would genuinely address affordability or merely fuel demand without resolving supply constraints.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

[email protected]

Ryan Dash PREC

778.898.0089
[email protected]

www.thevancouverlife.com

This week in Canadian real estate, fresh GDP data revealed slower-than-expected economic growth. Canada’s economy grew by 1% year-over-year in the third quarter, with GDP rising only 0.1% in September. On a per capita basis, GDP actually declined for the seventh consecutive quarter, reflecting further economic challenges. These weaker-than-anticipated numbers have shifted market expectations for a potential rate cut in December, with a 33% probability now placed on a 50-basis-point reduction. Despite these pressures, Canadians are saving at near-record levels! Household savings rate hitting 7.1% in Q3, as disposable income growth outpaced spending. This cautious approach reflects a broader sense of economic uncertainty and distrust in government policy as households prioritize financial stability amid ongoing volatility.

However, alongside increased savings, Canadians are grappling with mounting debt and insolvencies. Credit card balances reached a record $110 billion in September, growing 9.7% year-over-year. Consumer insolvencies climbed 8.8% nationally and surged 18.4% in Ontario, returning to pre-pandemic levels. While not yet alarming, the pace of insolvency growth could escalate to financial crisis levels by 2025 if left unchecked. Meanwhile, the cost of housing remains a significant burden. Monthly mortgage payments for the typical home dropped slightly in October but remain up 90% compared to 2021 levels, with the average payment now sitting at $2,975—nearly double what it was just three years ago.

In the mortgage market, both fixed and variable rates have seen modest declines from their 2024 peaks. Fixed rates currently average 4.4%, while variable rates are at 4.9%. These rates are expected to fall further, with markets projecting a bottom of 3% by mid-2025 as the Bank of Canada faces pressures from slowing inflation, weaker GDP, and economic risks such as Trump’s proposed 25% tariffs. These tariffs could have a 2–3% negative impact on Canada’s GDP, potentially driving the central bank to accelerate rate cuts to support the economy. Additionally, the rental market is poised to stabilize further, with new supply and slower population growth expected to ease inflationary pressures in housing over the next two years.

Regionally, Vancouver’s housing market continues to gain slight momentum. November sales are projected to rise 29% year-over-year, bringing activity closer to long-term 10-year averages. New listings, however, increased by just 10%, creating an environment where limited supply is supporting prices. Median prices climbed for the second month in a row, rising slightly by $5,000, while average prices jumped by $34,000. This contrasts sharply with the GTA, where new condo sales were down 91% compared to decade averages, and starts are forecasted to hit 20-year lows by 2025. While Toronto’s challenges weigh on the broader market, Vancouver’s resilience offers a glimmer of hope for Canadian real estate. Full November statistics will provide further clarity in the week ahead.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

[email protected]

Ryan Dash PREC

778.898.0089
[email protected]

www.thevancouverlife.com

This week, we’re examining how key economic indicators, policy changes, and market trends are influencing everything from interest rates to housing affordability. Inflation has officially returned to the Bank of Canada’s 2% target, but what does this mean for the direction of interest rates heading into 2025? 

The Bank faces a delicate balancing act with inflation on target, GDP revisions upward, and the U.S. economy remaining strong. Projections suggest we’ll see modest rate cuts early in the year, stabilizing at an overnight rate of 3% by March. Homeowners renewing mortgages in 2025 should plan accordingly, as this will still translate to higher payments compared to the historically low rates of recent years.

On the international front, the potential effects of a Trump presidency loom large over Canada’s economy. Historically, Canada has avoided recessions during periods of U.S. growth exceeding 2%, suggesting some economic resilience. Trump’s focus on energy infrastructure could revive projects like the Keystone XL pipeline, boosting Alberta’s energy sector, while a weak Canadian dollar might attract foreign investment into commercial real estate. Additionally, changes in U.S. immigration policy could prompt an influx of skilled workers into Canada, potentially offsetting recent adjustments to our own immigration targets.

Closer to home, the housing market is facing mounting pressures. Despite ambitious governmental promises to build 3.9 million homes over the next seven years, housing starts have dropped sharply—down 12% nationwide and 30% in British Columbia year-over-year. 

Compounding this, delayed projects and developer insolvencies, like THIND’s high-profile collapse, are exacerbating the supply crisis. THIND’s troubles have halted thousands of planned units, underscoring the strain that rising interest rates are placing on even established developers. This ongoing shortfall in housing starts signals a grim future, with significant shortages expected in completions by 2027-2029.

Mortgage renewals are another pressing issue, with 23% of all existing Canadian mortgages set to renew in 2025 and 31% in 2026—above the typical annual renewal rate of 20%. For Vancouver homeowners who locked in rates as low as 2% in 2020, the shift to today’s rates could mean monthly payment increases of nearly 30%. However, the average 21% appreciation in home values over the past five years offers a potential safety net, allowing homeowners to downsize while preserving some equity and solvency.

From inflation and interest rates to housing starts and developer challenges, this episode covers the critical issues shaping Canada’s real estate future. Stay tuned as we break down what it all means for you, whether you’re a homeowner, investor, or industry professional.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

[email protected]

Ryan Dash PREC

778.898.0089
[email protected]

www.thevancouverlife.com

This week, six critical factors emerged that could significantly influence the Canadian housing market in the coming months. First, Statistics Canada revised GDP figures upward, adding 1.3% growth between 2021 and 2023, equivalent to an entire year of economic activity. While this suggests a stronger-than-expected economy, it complicates the Bank of Canada’s recent rate-cutting strategy. Markets now anticipate a 0.25% rate cut in December, with a 60% chance of a larger 0.50% cut, which could stimulate housing demand.

Second, the potential impact of Trump’s proposed tariffs looms large. Should tariffs reach 10-20%, they could shrink Canada’s GDP by up to 2%, reduce foreign investment, and deepen economic challenges. While lower growth may prompt further rate cuts, boosting housing sales and construction, broader economic instability could counteract these benefits.

Meanwhile, rental rates have begun to drop, with a 1.2% national year-over-year decline—the first in years. Vancouver and Toronto saw the steepest drops, at 8.4% and 9.2%, respectively. This shift is driven by record condo completions, slowing population growth, and renters reaching affordability limits. Although rents remain 29% higher than three years ago, the decline provides some relief to tenants.

In the U.S., inflation ticked up to 2.6% in October, its first monthly increase in six months, prompting markets to price in rate cuts from both the Federal Reserve and Bank of Canada this December. Lower borrowing costs could invigorate the housing market, setting up for a strong spring in 2025.

October also saw a surge in national home sales, with Toronto leading the way with a 44% year-over-year increase. This spike is largely attributed to pent-up demand and renewed consumer confidence driven by expectations of lower interest rates. Early November data suggests this trend is continuing, pointing to a robust spring market ahead.

Finally, a potential “mortgage war” is brewing as 50% of Canadian mortgages are set to renew in the next two years. With new rules allowing borrowers to switch lenders without requalifying, competition among banks is expected to intensify. Savvy homeowners stand to save tens of thousands of dollars by shopping for better rates, making it crucial to prepare for these opportunities now.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

[email protected]

Ryan Dash PREC

778.898.0089
[email protected]

www.thevancouverlife.com

In October, Vancouver’s real estate market exhibited mixed signals. Despite a continued decline in home prices, with the benchmark HPI dropping for the fifth consecutive month by 0.6%, a surprising surge in sales emerged. Total sales jumped 43% from September and 32% year-over-year, marking October 2024 as the third-highest sales month of the year and the most active October since 2021. Experts suggest that the rate cuts so far, combined with optimism for further reductions, may have spurred buyers back into the market. This sentiment sharply contrasts with 2022 when rising interest rates deterred buyers.

The recent U.S. election results, with Trump securing the presidency, bring significant economic implications for Canada. Key among these is the potential for new tariffs on Canadian imports to the U.S., which could add $30 billion in economic costs, with Canadian manufacturing and consumer prices bearing the brunt. This inflationary impact could strain housing affordability, as higher import costs would drive up construction expenses, potentially limiting new builds and pushing home prices higher. To counter these risks, the Bank of Canada might reduce rates further, which could increase Canadian homebuyers' purchasing power but also encourage some to enter the market amid potential economic downturns. 

Affordable housing targets in Canadian cities like Ottawa and West Vancouver face substantial setbacks due to escalating construction costs and financing issues. Ottawa has fallen short of its 500-unit annual goal every year since 2020, citing a funding gap of $931 million and a 150% increase in construction costs since 2021. West Vancouver also anticipates falling short of provincial targets, estimating that only 58 affordable units will be built in 2024—well below the province’s target of 220. This affordability gap points to ongoing challenges for both public and private sectors, with limited options for expanding affordable housing despite rising demand.

The “17 Villages” initiative in Vancouver seeks to create a gentler approach to housing density, adding low-rise residential buildings, townhouses, and multiplexes within 400 meters of established retail streets. This feels like a European-inspired model that will anchor neighborhoods with walkable retail and community amenities, allowing young professionals and families to stay in these areas at potentially lower costs. Unlike high-rise developments, these “villages” aim to enhance neighborhood character, create small business opportunities, and offer diverse housing options without dramatically altering community aesthetics.

Touching on the October stats, Vancouver’s real estate inventory fell by 7% month-over-month to a five-month low but remains 25% higher than last October and 26% above the 10-year average. With over 5,400 new listings—a 17% annual increase—the market has seen an influx of choices for buyers, while inventory is the highest for October since 2014. The sales-to-active listings ratio rose back to 19%, with townhomes and apartments now moving into seller’s market territory. Detached homes saw a slight uptick in demand, but overall, the market remains balanced, favoring neither buyers nor sellers strongly.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

[email protected]

Ryan Dash PREC

778.898.0089
[email protected]

www.thevancouverlife.com

In a climate of economic turbulence, Canada’s economy is showing signs of a downturn that could significantly affect Vancouver’s real estate market. The Bank of Canada recently reduced its interest rate by 50 basis points, following weaker-than-expected inflation and a rise in business insolvencies. 

While these rate cuts may offer mortgage relief, they’re also weakening the Canadian dollar, which has hit a 20-year low against the U.S. dollar, potentially increasing imported inflation as time goes on. Meanwhile, Canadian GDP has remained stagnant, with annual growth forecasts now below 1%, well below the anticipated 2.8%. This slower growth could prompt further rate cuts as the Bank seeks to stimulate the economy.

Employment trends are also concerning, especially among young men, with unemployment for this demographic rising sharply, indicating possible downward pressure on inflation. We touch on declining sales in manufacturing and a troubling inventory-to-sales ratio that's been further emphasized by the challenges facing Canada’s economy.

Housing offers a mixed picture: as mortgage payments drop and rates fall, consumer confidence is on the move up. Sales volumes are expected to increase next year by 10%-20%, but the government’s recent immigration cuts could also reduce that demand, especially for rentals. The new targets project significant reductions in Canada’s temporary resident population, potentially leading to Canada’s first-ever years of negative population growth, impacting GDP, tax revenues, and the housing sector's stability. This would be a first for Canada after non-permanent residents hit an all-time high of 3 million people. 

The Vancouver housing market stands to be directly affected. Dropping interest rates may ease some home-buying pressures, but declining immigration and job losses in construction and housing services could lead to a long-term housing shortage and potential tax increases as governments try to offset reduced revenues. For buyers and renters alike, this evolving economic landscape could spell both opportunities and challenges, making it a crucial topic for those involved in Vancouver real estate.

Also, we are welcoming your questions!! With these complex dynamics at play, what questions do you have about the market or where you find yourself today? Message us directly or post them in the comment section below, and we’ll provide informed insights in next week’s episode!

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

[email protected]

Ryan Dash PREC

778.898.0089
[email protected]

www.thevancouverlife.com

In this episode, the podcast hosts dive into one of the most transformative housing policies in British Columbia’s recent history—the Small Scale Multi-Unit Housing Initiative, introduced under Bill C44. This policy marks a significant shift in how housing developments are approached, aiming to address the critical shortage of homes in the Lower Mainland by automatically rezoning single-family and duplex lots to allow for higher-density developments. By opening up these properties for multi-unit construction, the policy seeks to tackle the housing crisis, create new investment opportunities, and provide much-needed jobs in the construction industry.

However, the initiative has sparked heated debate. While it promises to inject new housing stock into the "missing middle" market, not all stakeholders are on board. Many neighborhoods have adopted a Not In My Backyard (NIMBY) stance, pushing back against the increased density and potential changes to their community dynamics. Some municipalities have leveraged the policy to increase Development Cost Charges (DCCs) and Amenity Contribution Charges (ACCs), which could make the process more expensive for developers, adding layers of complexity to what seems like a streamlined solution.

To unpack the real opportunities and challenges presented by this policy, we are joined by James Livingston, founder of Lightwell Developments. As someone deeply embedded in the development space, James offers listeners a rare behind-the-scenes look at how companies like his are capitalizing on the deregulation. His firm specializes in working with homeowners who might not have the knowledge or the capital resources to redevelop their property on their own. James explains how Lightwell’s business model allows these homeowners to partner with developers by turning their properties into multi-unit dwellings and potentially earning more than they would through a traditional home sale—without the hassle of open houses, showings, or putting their home on the market.

The episode then shifts to the criteria Lightwell Developments uses when scouting properties. James breaks down what makes a lot ideal for redevelopment, from its size and location to zoning regulations and municipal cooperation. 

The discussion moves beyond the homeowner’s perspective to explore the broader market implications of the Small Scale Multi-Unit Housing Initiative. While many developers, architects, and investors are enthusiastic about the changes, some argue that the policy doesn’t go far enough to meet future density demands. James provides his take on the policy’s strengths and limitations, discussing whether it can truly solve the housing crisis or if more drastic measures are needed to fulfill Metro Vancouver’s long-term housing requirements.

To round out the conversation, the episode addresses another key audience—INVESTORS who may not own property but want to invest capital. James outlines the financial mechanics of investing in his multi-unit development fund, from expected returns to minimum investment amounts and typical timeframes. He provides insights into how this growing sector offers attractive opportunities for investors looking to diversify their portfolios and tap into the high demand for new housing in the region.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife

Dan Wurtele, PREC, REIA

604.809.0834

[email protected]

Ryan Dash PREC

778.898.0089
[email protected]

www.thevancouverlife.com