Enhancing Financial Resilience Through Mortgage Stress Tests
Carlos Beauregard
In Canada, 39% of households have mortgages, their largest recurring expense (Statistics Canada, 2024). To ensure financial stability, regulators have required federally regulated lenders to conduct mortgage stress tests for over a decade. Stress tests evaluate whether borrowers can manage higher payments under scenarios like income reductions or cost increases. By 2018, these tests covered most mortgages, boosting resilience while curbing credit growth and house price surges.
Amid the 2022 interest rate hikes, stress tests proved effective in preventing defaults, enhancing credit quality, and ensuring borrower resilience, particularly for high-LTV loans. By limiting excessive borrowing through robust debt service calculations, they strengthen Canada’s financial system.
Key Findings:
2016 Tests (Insured Mortgages):
Improved credit quality but had limited market impact.
2018 Tests (Uninsured Mortgages):
Slowed credit growth, moderated house price growth, and enhanced resilience.
2022 Rate Hikes:
Regions with prior stress test exposure saw fewer delinquencies, especially for high-LTV borrowers.
The Data
This analysis draws on three primary data sources:
- Loan-Level Mortgage Origination Data
- Represents ~80% of new mortgages from OSFI-regulated entities (Crawford, Meh, and Zhou, 2013).
- Includes details on mortgage (origination date, balance, interest rate, LTV, GDS/TDS ratios, type, and amortization) and borrower (income and location by FSA).
- Focuses on high-ratio (insured) and low-ratio (uninsured) mortgages for new purchases.
- Credit History Data (TransUnion)
- Covers nearly all Canadian borrowers with monthly updates.
- Tracks liabilities (e.g., mortgages, loans) and borrower traits (credit scores, age, and location).
- Teranet–National Bank House Price Indexes
- FSA-level price indexes based on repeat-sales methodology, unaffected by property changes.
- Used by regulators to monitor housing market trends.
Regional Data Aggregation: Borrower data is consolidated by census agglomerations in urban areas and by FSAs in rural regions.
Mortgage Stress Test Policies: 2016 and 2018
These policies tightened qualification criteria, affecting high-ratio (2016) and low-ratio (2018) mortgages:
- Counterfactual TDS Ratio Analysis:
- New minimum qualifying rates (MQR) were applied to compute counterfactual TDS ratios for mortgages issued 12 months before and after the policies.
- 2016 Policy Impact:
- Pre-policy, 26% of high-ratio mortgages exceeded the 44% TDS threshold.
- Post-policy, virtually none did, demonstrating significant constraint on high-ratio mortgage approvals.
Chart 2 visualizes the reduction in mortgages exceeding TDS limits, illustrating the policy's effectiveness.
Impact of 2016 and 2018 Mortgage Stress Test Policies on TDS Ratios 2016 Policy (High-Ratio Mortgages)
Chart 2 compares the total debt service (TDS) ratios for high-ratio mortgages before and after the October 2016 policy.
- Pre-Policy:
- Blue bars represent mortgages issued between October 2015 and September 2016.
- Under the new rules, 26% of these mortgages would have exceeded the TDS threshold of 44%.
- Post-Policy:
- Black-outlined hollow bars represent mortgages issued between November 2016 and October 2017.
- Virtually no mortgages exceeded the 44% TDS limit, demonstrating the policy's effectiveness in constraining high-ratio mortgage issuance.
2018 Policy (Low- and High-Ratio Mortgages)
Chart 3 extends this analysis to the January 2018 policy, which primarily affected low-ratio mortgages.
- High-Ratio Mortgages (Panel b):
- Minimal differences between reported TDS ratios and counterfactual calculations indicate that the 2016 policy had already enforced TDS constraints effectively.
- Low-Ratio Mortgages (Panel a):
- Pre-Policy:
- Blue bars show that 29% of low-ratio mortgages issued between January 2017 and December 2017 would have exceeded the 44% TDS limit under the 2018 rules.
- Post-Policy:
- Black hollow bars indicate that 13% of low-ratio mortgages issued after January 2018 had qualifying TDS ratios above 44%.
This post-policy percentage reflects a balance between regulatory influence and FRFIs’ risk tolerance, with the 44% TDS limit remaining a significant, though non-binding, constraint for low-ratio mortgage qualification.
Sources:
- Office of the Superintendent of Financial Institutions
- Bank of Canada Calculations (Last observation: October 2017)
Regional Impacts of 2016 and 2018 Mortgage Stress Test Policies
The disqualified share refers to the proportion of mortgages issued in the 12 months preceding a policy that would not have qualified under the new rules. This measure, shown as the blue area to the left of the 44% TDS threshold in Charts 2 and 3, highlights the policies' restrictive effects across regions.
Key Observations:
- 2016 Policy (High-Ratio Mortgages):
- Targeted high-ratio mortgages, leading to disqualifications primarily in areas with more first-time homebuyers and higher loan-to-value (LTV) ratios.
- 2018 Policy (Low-Ratio Mortgages):
- Broader reach, affecting low-ratio mortgages, with a stronger impact in markets like Toronto and Vancouver, where property values and mortgage sizes are higher.
Geographical Variation:
Figure 1 illustrates regional differences in the disqualified share for both policies:
- The 2018 policy had a more pronounced effect in Greater Toronto and Vancouver compared to the 2016 policy. This aligns with these areas' higher prevalence of low-ratio mortgages and greater sensitivity to stricter TDS requirements.
- Regions with fewer high-value properties or lower homebuyer activity showed less impact from either policy.
By analyzing disqualified shares by geography, we see how each policy uniquely influenced borrowing behavior, reflecting regional housing market characteristics and mortgage profiles.
Regional Disparities in Policy Impact
The disqualified share, as mapped across Canada, highlights how the 2016 and 2018 mortgage stress test policies affected different locations. These maps categorize locations into quartiles based on disqualified shares, with brackets indicating whether endpoints are included or excluded (e.g., (0.41, 1] includes 1 but not 0.41).
Key Findings from Table 1
- Characteristics of Highly Exposed Areas:
- Locations with disqualified shares above the median show:
- Higher Loan-to-Value (LTV) Ratios: Suggesting more leveraged borrowers.
- Lower Incomes and Credit Scores: Indicating increased financial vulnerability.
- For the 2018 policy, these areas also experienced higher house price growth, emphasizing their sensitivity to tighter mortgage rules.
- Consistent Metrics Across Areas:
- Minimal differences were observed in:
- Total Debt Service (TDS) and Gross Debt Service (GDS) ratios.
- Payment-to-income ratios.
- Average amortization periods and mortgage rates.
Implications
The higher exposure of certain regions, particularly those with rapidly rising house prices, underscores the stress test policies’ focus on mitigating risk in overheated markets. By limiting high-LTV borrowing and imposing stricter qualification standards, these measures aimed to enhance financial stability, particularly in areas most vulnerable to economic or housing market shocks.
Key Metrics and Observations (October 2015 – September 2016)
This dataset provides insights into borrower and mortgage characteristics during the year leading up to the 2016 policy implementation, highlighting the financial profiles and lending practices of the period.
Key Metrics
- Loan-to-Value (LTV) Ratio:
Indicates the proportion of a mortgage loan relative to the appraised property value. High LTV ratios signify greater borrower leverage and risk. - Total Debt Service (TDS) and Gross Debt Service (GDS) Ratios:
Measure the share of household income allocated to debt payments. TDS includes all debts, while GDS focuses on housing costs. - Payment-to-Income (PTI) Ratio:
Represents the burden of mortgage payments relative to income.
Observations:
- Borrowers in high-LTV categories faced greater exposure to financial vulnerability under the 2016 policy due to stricter qualification criteria.
- The stress test policy introduced significant constraints, aiming to reduce systemic risk by limiting high-LTV borrowing.
- TDS, GDS, and PTI ratios were pivotal in assessing borrower financial resilience during the policy transition.
These metrics collectively shaped the evaluation and implementation of stress test rules, forming the foundation for a more robust and resilient mortgage market.
Note: LTV is the loan-to-value ratio, TDS is the total debt service ratio, GDS is the gross debt service ratio, and PTI is the payment-to-income ratio. The data covers January to December 2017 from sources including the Office of the Superintendent of Financial Institutions and Teranet-National Bank, with calculations by the Bank of Canada.
To evaluate the effects of macroprudential policy changes, a difference-in-differences approach is used. This method examines variations in the disqualified share across locations. The analysis estimates the impact of these policies on mortgage market variables such as the effective TDS ratio, mortgage size, credit score, LTV ratio, purchase values, and local house price growth.
The main coefficient in the empirical model determines if the policy induced behavioral changes in areas with greater exposure to the policy. Results are split between the 2016 and 2018 policy implementations, analyzing all mortgages and subsets of low- and high-ratio mortgages. Qualitative findings are summarized in Table 2, with detailed quantitative results provided in Appendix A.
Key Findings on Mortgage Policies and Their Impact
The study analyzes the effects of Canada’s 2016 and 2018 macroprudential policies and the 2022–23 monetary tightening, focusing on mortgage markets, credit quality, and borrower resilience.
2016 Policy (Targeting High-Ratio Mortgages)
- Effective TDS Ratio: High-ratio mortgages showed reduced TDS ratios in heavily impacted areas, confirming compliance with policy. No significant changes were seen for low-ratio mortgages.
- Mortgage Trends: High-ratio mortgage issuance fell, while low-ratio mortgages saw increased issuance and larger average sizes, indicating a shift toward low-ratio loans.
- Credit Quality: Borrowers improved their credit scores and down payments, particularly in areas most exposed to the policy.
- House Prices: Neither average purchase value nor house price growth slowed significantly.
2018 Policy (Targeting Low-Ratio Mortgages)
- Market Effects: Reduced mortgage issuance, average loan sizes, and slower house price growth in heavily exposed areas.
- Credit Quality: Improvements in credit scores and down payments for high-ratio mortgages suggest an indirect policy impact, possibly reflecting a shift to alternative lenders.
2022–23 Monetary Tightening
During this period of rising interest rates, the study assessed whether stress tests helped borrowers avoid delinquencies. Between March 2022 and October 2023, the Bank of Canada raised rates from 0.25% to 5.0%. Borrowers in areas more affected by macroprudential policies showed varying delinquency rates, demonstrating that stress tests may mitigate financial vulnerability in adverse conditions.
These findings highlight the critical role of targeted mortgage policies and stress tests in balancing market growth, credit quality, and financial resilience during economic shifts.
Insights on the Impact of Mortgage Stress Tests in Canada
Recent analysis highlights the effectiveness of mortgage stress tests in enhancing financial stability, particularly during periods of monetary policy tightening. Using anonymized data from January 2021 to October 2023, the study examines the outcomes of Canada’s 2016 and 2018 macroprudential policies on credit delinquencies and overall borrower resilience.
Key Findings
- Impact of the 2016 Policy
- Targeting high-ratio mortgages, the 2016 policy improved credit quality by reducing debt service ratios and increasing borrower resilience.
- During the 2022–23 monetary tightening, delinquencies in areas most exposed to the 2016 policy rose less significantly than in less exposed areas, particularly for non-mortgage credit products like credit cards and auto loans.
- The policy indirectly bolstered resilience against rising mortgage payments, even though some borrowers shifted to unregulated lenders.
- Impact of the 2018 Policy
- By expanding stress tests to low-ratio mortgages, the 2018 policy effectively curbed credit and house price growth.
- The stress tests improved borrower quality within the regulated market but had less impact on 90-plus day delinquency rates for non-mortgage credit products compared to the 2016 policy.
- General Trends
- Borrowers subject to stress tests demonstrated better financial preparedness during the 2022–23 interest rate hikes, reducing the likelihood of delinquencies.
- Areas heavily exposed to macroprudential policies showed a subdued increase in delinquency rates, underscoring the policies’ effectiveness.
Conclusion
Mortgage stress tests have proven to be a vital tool in ensuring financial stability. While the 2016 policy improved borrower credit quality, the 2018 policy successfully mitigated housing and credit market booms. Together, these measures enhanced borrower resilience, helping households manage significant increases in mortgage payments without falling behind on obligations during economic uncertainty.
These findings reaffirm the importance of well-designed macroprudential policies in safeguarding the financial system and promoting economic resilience.
Le gouvernement fédéral a annoncé un report de l’augmentation prévue de l’impôt sur les gains en capital, repoussant la date de mise en œuvre du 25 juin 2024 au 1er janvier 2026. Le ministre des Finances, Dominic LeBlanc, a fait cette annonce aujourd’hui, invoquant la nécessité d’apporter plus de certitude aux contribuables et aux entreprises avant la prochaine saison fiscale. L’augmentation proposée ferait passer le taux d’inclusion des gains en capital—la portion des gains imposable—de 50 % à 66,7 % pour les particuliers réalisant plus de 250 000 $ de gains en capital annuels, ainsi que pour les entreprises et la plupart des fiducies. Initialement introduit dans le budget 2024, ce changement n’avait pas encore été légiféré lorsque le Parlement a été prorogé plus tôt cette année, laissant son avenir incertain. Avec des élections fédérales prévues plus tard cette année, un changement de gouvernement pourrait entraîner l’abandon total de cette mesure. Le ministre LeBlanc a souligné que cette décision de report visait à assurer une certaine stabilité. "Étant donné le contexte actuel, notre gouvernement a estimé qu’il s’agissait de la décision responsable à prendre", a-t-il déclaré, réaffirmant l’engagement du gouvernement à dialoguer avec les Canadiens sur les politiques fiscales favorisant la croissance économique. Bien que ce report apporte de la clarté aux contribuables, il pourrait également affecter les budgets fédéral et provinciaux en retardant les recettes attendues de cette hausse d’impôt et en compliquant l’atteinte des objectifs budgétaires à court terme. Les exemptions et mesures connexes maintenues Malgré le report de la hausse de l’impôt sur les gains en capital, plusieurs mesures associées entreront en vigueur comme prévu : Exonération pour résidence principale : Aucun impôt sur les gains en capital lors de la vente d’une résidence principale, garantissant ainsi l’exonération des bénéfices. Seuil annuel de 250 000 $ (en vigueur le 1er janvier 2026) : Les particuliers réalisant des gains inférieurs à ce montant continueront de bénéficier du taux d’inclusion de 50 %. Par exemple, un couple vendant un chalet avec un gain de 500 000 $ ne paiera pas d’impôt supplémentaire. Augmentation de l’exonération cumulative des gains en capital (en vigueur le 25 juin 2024) : Cette exonération passe à 1,25 million $, réduisant l’impôt sur les actions de petites entreprises et les propriétés agricoles ou de pêche pour les Canadiens ayant des gains admissibles inférieurs à 2,25 millions $. Incitatif pour les entrepreneurs canadiens (en vigueur en 2025) : Réduction du taux d’inclusion à un tiers pour un maximum de 2 millions $ de gains admissibles, avec une augmentation progressive jusqu’à 2 millions $ d’ici 2029. Les entrepreneurs pourraient ainsi payer moins d’impôts sur jusqu’à 6,25 millions $ de gains. Bien que l’augmentation de l’impôt sur les gains en capital soit reportée, ces mesures visent à concilier équité fiscale et incitation à l’investissement, tout en garantissant un soutien continu aux petites entreprises et aux investisseurs individuels.
The federal government has announced a delay in its planned capital gains tax increase, moving the implementation date from June 25, 2024, to January 1, 2026. Finance Minister Dominic LeBlanc made the announcement today, citing the need to provide taxpayers and business owners with greater certainty ahead of the upcoming tax season. The proposed increase would raise the capital gains inclusion rate—the portion of gains subject to tax—from 50% to 66.7% for individuals earning over $250,000 in annual capital gains, as well as for corporations and most trusts. Originally introduced in Budget 2024, the change had not yet been legislated when Parliament was prorogued earlier this year, leaving its fate uncertain. With a federal election expected later this year, a potential change in government could result in the proposal being scrapped entirely. Minister LeBlanc emphasized that the decision to delay was made in the interest of stability. “Given the current context, our government felt this was the responsible course of action,” he stated, reaffirming the government's commitment to engaging with Canadians on fiscal policies that support economic growth. While the delay provides clarity for taxpayers, it could also impact both federal and provincial budgets, postponing anticipated revenue from the tax increase and affecting short-term fiscal targets. Exemptions and Related Measures Proceed as Planned Despite the postponement of the tax hike, several related measures will move forward on schedule. These include: Principal Residence Exemption: No capital gains tax on the sale of a primary home, ensuring profits remain tax-free. $250,000 Annual Threshold (Effective January 1, 2026): Individuals with gains below this amount will continue to benefit from the 50% inclusion rate. For example, a couple selling a cottage with a $500,000 gain would not face additional taxes. Lifetime Capital Gains Exemption Increase (Effective June 25, 2024): The exemption rises to $1.25 million, reducing taxes on small business shares and farming/fishing properties for those with eligible gains under $2.25 million. Canadian Entrepreneurs’ Incentive (Effective 2025): Lowers the inclusion rate to one-third for up to $2 million in eligible gains, increasing annually to $2 million by 2029. Entrepreneurs could pay reduced taxes on up to $6.25 million in gains. While the capital gains tax increase has been deferred, these measures are intended to balance tax fairness with investment incentives, ensuring continued support for small businesses and individual investors.
Des millions de Canadiens renouvelleront leur hypothèque en 2025, passant souvent de taux historiquement bas. Avec des taux ayant doublé depuis 2020, cette transition pourrait entraîner un choc de paiement. Toutefois, la forte concurrence entre les prêteurs offre des opportunités pour obtenir de meilleures offres. Perspectives des taux d’intérêt La Banque du Canada a récemment réduit son taux directeur de 0,25 % à 3 %, laissant entrevoir d’autres baisses possibles. Si cette tendance se poursuit, les taux hypothécaires variables pourraient chuter, tandis que les taux fixes suivraient la baisse des obligations. Pourquoi 2025 est une année unique Plus de 1,2 million d’hypothèques, représentant près de 590 milliards de dollars, arrivent à échéance. La plupart des emprunteurs avaient initialement des taux entre 1 % et 2,5 %, alors que les taux actuels se situent entre 4 % et 6 %, posant des problèmes d’accessibilité financière. Comment les prêteurs rivalisent Grandes banques : Offrent l’alignement des taux, des offres groupées et des services numériques améliorés. nesto : Plus grand prêteur numérique du Canada, proposant des taux 10 à 40 points de base inférieurs à ceux des banques, permettant aux emprunteurs d’économiser des milliers de dollars. Économies potentielles Une réduction de 40 points de base peut permettre d’économiser des milliers de dollars sur une hypothèque. Pour un prêt de 500 000 $, les taux plus bas de nesto pourraient générer plus de 11 700 $ d’économies par rapport aux grandes banques. Comment obtenir le meilleur taux de renouvellement Anticipez: Verrouillez un taux avantageux jusqu’à 150 jours à l’avance. Comparez les offres: Ne prenez pas la première offre, examinez les options des banques, courtiers et prêteurs numériques. Taux fixe ou variable: Les taux fixes offrent une stabilité, tandis que les taux variables pourraient baisser avec d’autres réductions de la Banque du Canada. Négociez et profitez des incitations: Demandez un alignement des taux, des offres de remboursement en argent et explorez les exemptions aux tests de résistance. Impact économique sur les hypothèques Les tensions commerciales entre les États-Unis et le Canada pourraient influencer davantage les taux, entraînant des réductions supplémentaires de la Banque du Canada. Conclusion Avec une concurrence accrue, les propriétaires ont un fort pouvoir de négociation en 2025. Comparer les offres peut permettre des économies importantes. Vérifiez dès maintenant les taux pour obtenir la meilleure offre.
Millions of Canadians will renew their mortgages in 2025, many transitioning from historic low rates. With rates now doubled since 2020, this shift may cause payment shock. However, aggressive competition among lenders presents opportunities for better deals. Interest Rate Outlook The Bank of Canada recently cut its key rate by 0.25% to 3%, signaling potential future cuts. If this trend continues, variable mortgage rates may drop, while fixed rates could decline alongside bond yields. Why 2025 Is Unique Over 1.2 million mortgages—worth nearly $590 billion—are up for renewal. Most borrowers originally locked in rates between 1–2.5%, while current rates stand at 4–6%, raising affordability concerns. How Lenders Are Competing Big Banks: Offering rate-matching, bundling products, and expanding digital services. nesto: Canada’s largest digital lender, offering rates 10–40 basis points lower than banks, saving borrowers thousands. Potential Savings A 40-basis-point reduction could save thousands over a mortgage term. On a $500,000 mortgage, nesto’s lower rates could mean over $11,700 in savings versus big banks. How to Get the Best Renewal Rate Start Early: Lock in a low rate up to 150 days in advance. Compare Rates: Never accept the first offer; explore options from banks, brokers, and digital lenders. Fixed vs. Variable: Fixed rates offer stability; variable rates may drop with further BoC cuts. Negotiate & Leverage Incentives: Request rate matching, cashback deals, and explore stress test exemptions. Economic Impact on Mortgages Potential US-Canada trade tensions could impact rates further, leading to additional BoC cuts. Bottom Line With heightened competition, homeowners have leverage in 2025’s renewal wave. Shopping around can secure significant savings. Compare rates now to ensure the best deal.
En 2023, l’Ontario dominait les recherches immobilières au Canada, mais l’année dernière a vu un glissement vers des régions plus abordables comme l’Alberta, selon Zoocasa. Des villes comme Edmonton et Calgary ont gagné en popularité grâce à leurs coûts de logement plus faibles et à leurs frais de subsistance réduits. Cette tendance se reflète dans les cinq villes les plus recherchées au Canada en 2024 : Toronto, Edmonton, Calgary, Mississauga et Vancouver. Toronto et Vancouver dominent le marché Toronto reste en tête, avec des loyers moyens pour un appartement d'une chambre à 2 374 $ et des prix de maisons atteignant 1 061 700 $. Vancouver suit de près, affichant les loyers moyens les plus élevés du Canada à 2 534 $ et des prix de maisons moyens à 1 172 100 $. Mississauga demeure une option privilégiée pour ceux cherchant la proximité de Toronto, offrant des loyers légèrement plus abordables à 2 279 $. Le marché immobilier en Ontario Le marché immobilier de l’Ontario reste dominant, soutenu par sa densité de population et ses opportunités économiques. Les principales villes comprennent : Hamilton : Située à une heure à l’ouest de Toronto, elle attire les primo-accédants grâce à ses prix de logements et loyers relativement abordables. Oshawa : Réputée pour ses copropriétés en rangée économiques, Oshawa séduit les acheteurs soucieux de leur budget tout en offrant un accès facile à Toronto. Ottawa : La capitale du Canada offre un marché de l’emploi stable, une qualité de vie élevée et des logements plus abordables que ceux de Toronto. Sa proximité avec les lacs pittoresques du Québec en fait également une destination prisée pour les propriétés de villégiature. L’Alberta : Une alternative abordable Face à l’augmentation du coût de la vie, les villes de l’Alberta offrent des options pratiques pour les acheteurs et les locataires : Calgary : Alliant commodités urbaines et aventures en plein air, Calgary propose des loyers moyens pour un appartement d'une chambre à 1 634 $ et des prix de maisons à 575 600 $. C’est un choix attrayant pour les familles et les jeunes professionnels. Edmonton : Reconnue pour son accessibilité, Edmonton offre des loyers moyens à 1 355 $ et des prix de maisons à 395 400 $, ce qui en fait l’une des métropoles les plus économiques du Canada. Son économie robuste et son coût de la vie bas attirent les investisseurs et les primo-accédants. Qui stimule le marché ? Deux groupes démographiques façonnent le marché immobilier canadien : Jeunes professionnels et primo-accédants (25-34 ans) : Ils privilégient l’accessibilité et la commodité urbaine, se tournant souvent vers des marchés plus économiques comme l’Alberta. Acheteurs de mi-parcours (45-64 ans) : Ce groupe se concentre sur la réduction de la taille de leur logement ou l’aide à leurs enfants pour acquérir une propriété. Alors que l’accessibilité devient un enjeu central, des régions comme l’Alberta gagnent en attrait, redéfinissant le paysage immobilier canadien.
In 2023, Ontario dominated Canada’s housing market searches, but last year saw a shift towards more affordable regions like Alberta, according to Zoocasa. Cities such as Edmonton and Calgary gained attention for their lower housing costs and reduced living expenses. This trend is reflected in Canada’s top five most-searched cities in 2024: Toronto, Edmonton, Calgary, Mississauga, and Vancouver. Toronto and Vancouver Lead the Market Toronto continues to top the charts, with one-bedroom rents averaging $2,374 and home prices reaching $1,061,700. Vancouver follows closely, boasting Canada’s highest average rents at $2,534 and home prices averaging $1,172,100. Mississauga remains a key choice for those seeking proximity to Toronto, offering slightly more affordable rents at $2,279. Ontario’s Housing Landscape Ontario’s real estate market remains dominant, driven by population density and economic opportunities. Key cities include: Hamilton : Located an hour west of Toronto, it attracts first-time buyers with its relatively affordable home prices and rents. Oshawa : Known for its budget-friendly condo townhouses, Oshawa appeals to cost-conscious buyers seeking easy access to Toronto. Ottawa : Canada’s capital offers a stable job market, high quality of life, and housing more affordable than Toronto. Its proximity to Quebec’s lakes also makes it a popular destination for cottage properties. Alberta : An Affordable Alternative With rising living costs, Alberta’s cities offer practical options for buyers and renters: Calgary : Combining urban amenities with outdoor adventures, Calgary features one-bedroom rents averaging $1,634 and home prices at $575,600. It’s an attractive choice for families and young professionals. Edmonton : Known for its affordability, Edmonton offers one-bedroom rents at $1,355 on average and home prices of $395,400, making it one of the most cost-effective urban centers in Canada. Its strong economy and lower cost of living draw investors and first-time buyers alike. Who’s Driving the Market? Two key demographics are shaping Canada’s housing market: Young Professionals and First-Time Buyers (25-34): They prioritize affordability and urban convenience, often opting for more economical markets like Alberta. Mid-Life Buyers (45-64): This group is focused on downsizing or assisting their children with housing costs. As affordability takes center stage, regions like Alberta are becoming increasingly attractive, reshaping Canada’s housing landscape.
Le loyer moyen demandé au Canada a chuté à 2 109 $ en décembre, atteignant son niveau le plus bas depuis 17 mois, selon un rapport de Rentals.ca et Urbanation. Les loyers ont diminué de 3,2 % par rapport à décembre de l’année précédente, marquant le cinquième mois consécutif de baisse. Cette tendance à la baisse intervient après des années de forte augmentation des loyers, avec une hausse de 8,6 % en 2023 et une augmentation encore plus marquée de 12,1 % en 2022. Malgré cette récente diminution, les loyers moyens restent 16,8 % plus élevés qu’il y a cinq ans. Shaun Hildebrand, président d’Urbanation, attribue le ralentissement du marché locatif à plusieurs facteurs, notamment un nombre record de nouvelles constructions d’appartements, un ralentissement de la croissance démographique et des défis économiques en 2024. « Le marché locatif s’est assoupli dans la plupart des régions du pays l’année dernière », a déclaré Hildebrand dans le rapport. Il a également noté que, bien que les loyers puissent continuer à baisser en 2025, ces diminutions devraient être temporaires et limitées. Les perspectives à long terme suggèrent que les loyers repartiront à la hausse en raison d’un déficit chronique de logements locatifs au Canada. Hildebrand a souligné que le ralentissement actuel de la construction risque de restreindre l’offre, ce qui entraînera une accélération des loyers à l’avenir. Cette récente tendance offre un répit temporaire pour les locataires, mais elle met en lumière les défis persistants liés à l’accessibilité et à la pénurie de logements sur le marché locatif canadien.
The average asking rent across Canada fell to $2,109 in December, reaching its lowest level in 17 months, according to a report by Rentals.ca and Urbanation. Rents have decreased by 3.2% compared to December of the previous year, marking the fifth consecutive month of decline. This cooling trend comes after years of rapid rent growth, with rates climbing by 8.6% in 2023 and an even sharper 12.1% in 2022. Despite the recent drop, average rents remain 16.8% higher than they were five years ago. Shaun Hildebrand, president of Urbanation, cites several factors behind the rental market's slowdown, including a record number of apartment completions, slower population growth, and economic challenges in 2024. "The rental market softened across most parts of the country last year," Hildebrand stated in the report. He also noted that while rents may continue to decrease in 2025, the declines are likely to be temporary and minimal. The long-term outlook suggests upward pressure on rents will return due to a chronic undersupply of rental housing in Canada. Hildebrand emphasized that the current slowdown in construction will likely tighten supply, leading to accelerating rents in the future. This recent trend offers a brief reprieve for renters, but it underscores the ongoing challenges posed by housing affordability and supply constraints in the Canadian rental market.
Imaginez acheter une maison et verrouiller un taux d'intérêt unique pendant 30 ans, avec des paiements constants et sans pénalités majeures en cas de remboursement anticipé. Si les taux baissent, vous pourriez refinancer pour réduire vos paiements mensuels. C’est le modèle américain du prêt hypothécaire fixe sur 30 ans, un système que le gouvernement canadien envisage d’adopter pour le marché immobilier, comme mentionné dans l’énoncé économique de l’automne. Aux États-Unis, ce modèle est soutenu par des organismes publics tels que Fannie Mae et Freddie Mac, qui achètent les prêts hypothécaires aux prêteurs et les transforment en titres financiers. Ce système libère des capitaux, permettant aux banques de proposer des termes hypothécaires plus longs et stables. Le Canada ne dispose pas d’un tel mécanisme, obligeant les prêteurs à renégocier les conditions tous les quelques années, ce qui entraîne des termes fixes plus courts, généralement autour de cinq ans. Adopter le modèle américain au Canada entraînerait probablement des taux d'intérêt plus élevés en raison des risques supplémentaires pour les prêteurs. Sans un soutien gouvernemental similaire à celui des États-Unis, les prêteurs canadiens devraient imposer une prime pour compenser l’incertitude liée aux taux d’intérêt à long terme et à la stabilité des emprunteurs. Bien que les prêts hypothécaires de 30 ans offrent une stabilité, les termes plus courts au Canada sont souvent assortis de taux plus bas, les rendant plus abordables. Ces renouvellements fréquents permettent également aux propriétaires de profiter des améliorations des conditions du marché, offrant une flexibilité qui pourrait être perdue avec des termes plus longs. Les experts estiment que, bien qu’attrayants, les prêts hypothécaires de 30 ans seraient coûteux au Canada et n’amélioreraient pas nécessairement l’accessibilité financière. Pour l’instant, le système canadien équilibre les besoins des consommateurs et la stabilité de l’industrie.
Imagine buying a house and locking in a single interest rate for 30 years, keeping payments steady with no major penalties for early repayment. If rates drop, you could refinance to lower your monthly payments. This is the U.S. 30-year fixed mortgage model, a system the Canadian government is exploring for its housing market, as mentioned in the recent fall economic statement. In the U.S., this model is supported by government-backed entities like Fannie Mae and Freddie Mac, which buy mortgages from lenders and turn them into securities. This system frees up capital, allowing banks to offer longer, stable mortgage terms. Canada lacks such a system, requiring lenders to renegotiate terms every few years, resulting in shorter fixed-rate terms, typically around five years. Adopting the U.S. model in Canada would likely lead to higher interest rates due to the additional risk lenders face. Without government support similar to the U.S. system, Canadian lenders would need to charge a premium to cover the uncertainty of long-term interest rates and borrower stability. While 30-year mortgages provide stability, Canadian shorter terms often come with lower rates, making them more affordable. These frequent renewals also allow homeowners to adjust to better market conditions, offering flexibility that might be lost with longer terms. Experts argue that, while appealing, 30-year mortgages would be costly in Canada and might not increase affordability. For now, Canada’s system balances consumer needs with industry stability.
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