The Bank of Canada has largely kept to the sidelines as it tries to get a sense of how U.S. tariffs will impact the economy — and some economists think it might just stay there. After a quarter-point cut in March, the central bank held its benchmark interest rate steady at 2.75 per cent in…
Home sale trend stabilizing in June 2025, halving the decline seen last month. Real Estate Board of Greater Vancouver Market Report Fraser Valley Real Estate Board Market Report Call Stan at 604-202-1412
Buying Through the Uncertainty Among the first-time home buyers, 67% felt uncertain or had concerns during their home-buying journeys. Their concerns ranged from living with high monthly carrying costs to interest rate increases, as 63% are already overpaying for a home worried about their future finances and mortgage payments. This fear may explain why more than half of these first-time buyers opted for co-ownership: purchasing a home with their parents, siblings, or even their friends instead of their partner or spouse. Most FTHBs believe that they have received the best mortgage for their needs. 56% chose a fixed mortgage, leading to 72% saying they are comfortable with their mortgage debt. 79% believe that homeownership is a good long-term financial investment, and 71% are confident that the value of their home will appreciate in the next year. Gifts and Incentives: A good 41% of FTHBs have received monetary gifts or inheritance towards their down payments, averaging $74,570; however, 80% of those who received a gift stated that they would have proceeded to purchase a home even without one. This means that purchasing a home would have still been within their means, whereas only 65% have paid the maximum of their budget. Other incentives that have helped first-time buyers include utilizing savings from a tax-free home savings account (FHSA) and savings outside of a registered retirement savings plan (RRSP). A Home Buyer’s Plan (HBP) is an FTHB program that enables a withdrawal of up to $60,000 from an RRSP to purchase a home, requiring repayment of that amount over 15 years. The federal government has also recently released a new GST relief program for FTHBs to receive a full GST rebate on new homes valued at up to $1 million and a phased reduction between $1 million and $1.5 million, which means FTHBs can save up to $50,000 on taxes. Unexpected Costs: Even though a majority of first-time home buyers discussed potential unexpected homebuyer costs with their mortgage professional before purchasing, 44% still incurred these unexpected costs. From lawyer or notary fees to home inspection and immediate repairs, these costs may have been anticipated and factored into the budget if they had known what to expect. 56% of FTHBs utilize social media, including YouTube, Facebook, and Instagram, to receive information regarding mortgage options. This is where it is crucial to do your homework to research and fact-check the information you are receiving! Much of the news and circulating information can be stretched, misrepresented, or not offer the whole truth.
If the older generation can comfortably contribute to their offspring’s home down payment, it often allows families to remain closer together, rather than new homeowners having to move far from the city in search of more affordable housing options. Intergenerational aid will likely continue, as 54% of millennials have indicated that they expect to provide the same assistance to their own children in the future. Additionally, everyone can rest assured in the long-term security that building equity offers new homeowners, so both parents and their adult children have peace of mind for the future. A Brief Window of Opportunity However, buyers should be warned that this time of opportunity won’t be around forever. With very sparse sales in the last couple of years, many development projects in the GTA have been delayed indefinitely. By 2026, we can expect that new housing inventory will stop coming in, and future buyers will only have today’s options available to them. When that time comes, we will no longer experience a buyer’s market, but the tables will be turned, and we will be in the midst of a significant seller’s market instead. It will also be much harder for first-time home buyers to enter the market in the future. The government plans to build over 200,000 rental units in the next 2 decades, which means that most developers will stop building condos and pivot toward building rental properties instead. This means that future buyers will only be able to purchase resale condos or new houses (attached or detached) if they want to become homeowners. The limited supply of resale condos and pricier new dwellings will be added challenges that many buyers will face. If you want to seize your limited opportunity today but are unsure where to start, our First-Time Home Buyers’ Seminar is perfect for you! You’ll learn everything you need to know to prepare for the financial obligations, find the perfect property, and buy with ease and security. At our in-person seminar, you will also get to ask any questions you may have with our experienced, caring, and award-winning agents. RSVP today!
Myth #2: Put Less Than 20% Down So Banks Will Give You Better Rates Some mortgage brokers and lenders have perpetrated an enormous lie. They have suggested that if buyers purposefully use a smaller-than-average down payment and pay for CMHC mortgage insurance (which is mandatory for down payments under 20%), banks will perceive these loans as “safer” and offer these buyers a much lower interest rate on larger loan-to-value ratios. This is wrong. Banks are not solely looking at down payment sizes to determine the lending rate they will offer you. They look at your income, credit history, and debt-to-income ratio, getting a comprehensive view of your financial status and ability to repay your loan over time. Any “risk” they face of you being unable to pay your loan is offset by the home value itself, not by CMHC insurance. If you don’t pay your mortgage, they have the right to sell your property under a power of sale and recoup their losses. In this way, the bank is always protected from default risk. If you do not need to pay for CMHC insurance, avoid it because it will add to your monthly costs and provide no additional benefit to you. You can do the math: if you were to put less than 20% down, you would have to pay CMCH insurance, which ranges from 0.60% to 4.5% plus tax, which adds thousands of dollars to your housing costs. The only reason someone would push you to put less than 20% down when you have the funds to put 20% down is that they are getting some sort of benefit from it, not you. Mortgage brokers are paid based on the loan size you sign up for, so if you request a 90% loan instead of an 80% loan on a $500,000 property, they will get paid more. The lender, too, will gain more over time as you pay them more interest on your larger loan. Despite this misinformation controversy, the CMHC does offer a great program to help buyers who have less than a 20% down payment break into the market earlier. However, you should use it with a full understanding of the long-term costs. Ultimately, if you have more money to put down, you should definitely do it instead of paying extra fees like CMHC insurance. However, there is one important exception to note. You can get lower rates for investing in multifamily homes (with 5 units or more) that are insured by the CMHC. Typically, for buildings with more than 5 units, you would need a commercial mortgage and a larger down payment, like 25% down, but the CMHC offers preferred rates for eligible multifamily home projects. One specific program, the CMHC MLI Select Program, allows you to receive a lower interest rate than regular residential and commercial rates with less money down while still giving you the power of leverage. This program is available to help build the type of multifamily housing Canada needs the most: affordable rentals, student housing, and retirement housing. The CMHC MLI Select Program allows you to invest in multifamily buildings with only 5% down and offers extended amortizations for up to 50 years and reduced interest rates.
In today’s news, it’s common to hear stories about Canadian real estate investors who bought at the market peak a few years ago and now feel buyer’s remorse as property values are sinking in 2025. Even investors who entered the market earlier than 2022 are struggling to shoulder higher carrying costs against a less-active rental market. Mortgage, credit card, and automobile delinquencies are also up, especially in Ontario. On top of this, the average non-mortgage debt for Canadian consumers climbed up 2.74% in the first quarter of the year to reach $21,859. With many homeowners under financial stress, investors may be considering their options, namely to hold, to refinance, and (as a last option) to sell. Costs of Refinancing vs. Selling To help illustrate the costs of refinancing versus selling, let’s take one example of an investor who currently owns a two-bedroom condo in Downtown Toronto, which he is renting out. This property is currently worth $800,000, which is a bit devalued from the market peak 3 years ago. He has owned it for a while, so his mortgage loan is only about $400,000. His carrying costs are high because he renewed his mortgage term when interest rates were around 5%, but he is nearing the end of his term and interest rates are much lower. His daughter is about to go to college, so he wants to help her cover her tuition and living expenses. Therefore, he is considering refinancing or selling his condo investment property to reduce his monthly financial burden and have extra funds to help his daughter. Let’s look at the cost breakdown of both options. Refinancing Selling Appraised Home Value $800,000 Current Mortgage Loan $400,000 Cost to Refinance or Sell (agent/broker fees, mortgage penalty, legal costs) $2,000 $50,000 Capital Gains Tax N/A $92,000 New Mortgage Loan $600,000 N/A Money Extracted Minus Costs $198,000 $257,000 In the short term, selling can provide more value for this investor, as the difference between refinancing and selling is an estimated $59,000 in cash. However, this is just a quick estimate and a shallow glance at the immediate effects of selecting either option. What happens when we look deeper and project into the future? Why Selling Could Cost You More Than You Think Once you sell, you give up the three pillars of real estate wealth: leverage, capital appreciation, and cash flow. The moment you sell, it all stops—no more equity growth, no more rental income, no more long-term gain. It ends right then and there. But when you refinance instead, you get the best of both worlds: ✅ Immediate access to cash to help you now ✅ Continued growth on your $100,000 investment Over the last 25 years, home prices have appreciated at an average rate of 7.5%. Even at a conservative 4% annual growth, if your property is worth $800,000, that’s $32,000 a year in equity gain—without lifting a finger. And that’s on top of your tenant paying down your mortgage and generating monthly cash flow. If you keep that property for another 15 to 25 years, the wealth potential multiplies. We’re not talking about a one-time gain of $257K. We’re talking about 10x that amount — while still holding the asset, benefiting from appreciation, and using someone else’s money (your tenant’s) to build your net worth. Refinancing keeps your wealth working. Selling shuts it down. What Are Your Long-Term Goals? Both refinancing and selling can help this investor achieve his immediate objectives: reducing his carrying costs and sending his daughter to college. However, in the long run, they will deliver different results. Therefore, it is crucial for any investor to keep their long-term goals in mind. Short-Term: Reduce Current Debt and Financial Strain If you are currently under the weight of heavy debts (including multiple mortgages, credit card debt, or other loans) and your carrying costs are growing out of hand, you may consider selling your property to tackle both of these problems at once. The net proceeds of selling your real estate investment can help you pay off other debts while immediately removing that property’s carrying costs from your monthly ledger. However, if your situation only needs a slight adjustment to be sustainable again and borrowing rates have dropped, refinancing your high-interest fixed-rate mortgage may be just what you need to carry on. By refinancing and getting a lower interest rate while extracting some optional extra cash, you may be able to lower your monthly costs and improve your cash flow to cover other expenses. You should still weigh the refinancing option against the qualifications you may need to apply for a new mortgage and the penalty of breaking your current mortgage agreement. Not everyone’s situation may allow them to refinance, as lenders will look at your debt ratios, which may have worsened since you last applied for a mortgage. Additionally, if you are near the beginning of your mortgage term or have a closed agreement, breaking your current mortgage may be extremely costly. Long-Term: Use The Equity to Spend or Invest More Refinancing offers an attractive avenue for you to extract cash equity without incurring the many expenses of selling your property. The cost to refinance for some can be quite minimal, as some mortgage brokers offer cashback incentives to cover legal fees. The equity you withdraw is not subject to capital gains tax either, which would otherwise take a huge bite out of your
When it comes to listing their home, most home sellers want three things: 1) to make a lot of money, 2) to put in minimal time and effort, and 3) to sell quickly. But the reality is, selling a home is rarely that simple. And homeowners who try to do it themselves—or receive bad advice—can…
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