August 2023 Market Stats

In this article, we'll delve into the August 2023 real estate market statistics and explore the factors that influenced these trends. From increased borrowing expenses to ongoing economic uncertainty and decisions made by the Bank of Canada, we'll dissect the data to gain a better understanding of what's happening in the housing market. Let's start by examining the key highlights.

Home Sales Decline in August 2023

Increased borrowing expenses, ongoing economic uncertainty, decisions made by the Bank of Canada, and limited listing availability led to a decline in home sales in August 2023 when compared to the same month in 2022. During this period, the average selling price remained relatively stable. When considering monthly adjustments for seasonal factors, both sales and the average price experienced slight declines

Greater Toronto Area Statistics

In August 2023, REALTORS® in the Greater Toronto Area recorded 5,294 sales, marking a 5.2 percent decrease from August 2022. However, there was a positive development in new listings, which saw a 16.2 percent year-over-year increase, offering some relief in terms of supply. Nonetheless, when looking at year-to-date listings, there remains a significant decrease compared to the same period in the previous year. On a seasonally adjusted basis, sales showed a marginal one percent month-over-month decline when compared to July 2023, while new listings experienced a slight 1.3 percent increase compared to July.

Stability in Average Selling Prices

"During the summer, we witnessed more balanced market conditions compared to the tighter spring market. Consequently, selling prices remained relatively stable, hovering around last year's levels and showing a slight dip compared to July. The increase in interest rates, which resumed in May after a pause in the winter and early spring, necessitated adjustments from many buyers to meet higher monthly payment requirements. Notably, not all sellers chose to accept prices lower than their expectations, leading to a reduction in the number of sales," explained TRREB Chief Market Analyst Jason Mercer.

In terms of statistics, the MLS® Home Price Index Composite benchmark for August 2023 demonstrated a year-over-year increase of 2.5 percent. Similarly, the average selling price experienced an uptick, albeit a modest one, of less than one percent, reaching $1,082,496 over the same period. On a month-over-month, seasonally adjusted basis, the MLS® HPI Composite benchmark remained largely unchanged, while the average price declined by 1.6 percent.

Impact of Interest Rates on Affordability

"As higher interest rates have unquestionably affected affordability, the anticipation of increased taxes will additionally strain households' financial positions, particularly younger buyers who may have limited savings. As the City of Toronto deliberates raising the municipal land transfer tax (MLTT) rate for properties exceeding $3 million as a source of revenue, it should also contemplate offering support to first-time homebuyers grappling with the challenge of entering the market. Adjusting the tax rebate threshold to align with today's elevated home prices could be a viable solution," suggested TRREB CEO John DiMichele.

Tactics and Trends in Home Listings

On a side note - Over the past month, We’ve observed an increasing number of homes listed for sale at notably aggressive prices. In certain instances, sellers opt to list their homes with artificially low asking prices as a tactic to draw in multiple buyer offers. However, when the offer date arrives and they receive multiple offers, the sellers often reject all of them because none meet their price expectations. Subsequently, these sellers relist their homes at the desired price, resulting in their properties languishing on the market for weeks as buyers are unwilling to meet those price demands.

While some sellers are gradually reducing their asking prices, others are taking their homes off the market temporarily, with plans to relist them in September. Although this is a common approach among real estate agents during the summer months when buyer activity typically slows, it remains intriguing to see how effective this strategy will be this year, given potential shifts in the market beyond the usual seasonal patterns.

The Unique Challenges of 2023

The uniqueness of this year stems from a changing market influenced by today's significantly higher interest rates. Some buyers are hitting the pause button because they find it increasingly challenging to afford a home at the current interest rates, especially when undergoing stress testing for a mortgage at around 8%.

Source: Market Watch

For the latest updates and in-depth analysis of real estate trends, stay tuned to Market Watch.

Get in Touch with Us

As always, we are here to guide and educate all our clients. If you have any questions or need assistance navigating the real estate market, don't hesitate to reach out to us. We're just a text, email, or phone call away!

Unveiling the Building Faster Fund: Premier Ford's $1.2 Billion Incentive Initiative for Housing Construction

In the midst of escalating criticism surrounding the Greenbelt land exchange, Premier Doug Ford has introduced an ambitious and far-reaching incentive initiative. Valued at a substantial $1.2 billion, the primary objective of this program is to incentivize municipalities to substantially ramp up their efforts in the realm of housing construction.

Premier Ford's Bold Initiative: Encouraging Municipalities to Boost Housing Construction

Unveiling the program, aptly named the "Building Faster Fund," Premier Doug Ford took the center stage during his address at the Association of Municipalities Conference in London on a Monday. He underlined that the central focus of this pioneering initiative is to provide substantial incentives to municipalities that successfully achieve their annual housing goals.

Addressing the Housing Challenge: Premier Ford Announces the Building Faster Fund

Premier Ford emphasized during his announcement that, while these housing targets will undoubtedly be ambitious, they will be thoughtfully grounded in the realm of realism.

Ontario's Housing Ambitions: Premier Ford's Commitment to Construct 1.5 Million New Homes by 2031

The Ontario Government's commitment to overseeing the construction of a staggering 1.5 million new homes within the province by the year 2031 is a well-established fact. This ambitious vision comes with a clear framework that allocates specific objectives to individual municipalities. However, the practical feasibility of realizing this goal has now come under intense scrutiny due to the inherent limitations posed by the current construction capacity.

Empowering Municipalities: The Funding Incentive for Housing Targets

Under this newly unveiled program, municipalities that successfully achieve 80% of their individual annual housing targets will be deemed eligible for funding. This funding eligibility will be allocated based on the proportionate contribution of each municipality to the overarching objective. Drawing a striking analogy, Premier Ford likened this qualification process to the world of academics, where those meeting or surpassing the prescribed standards would receive funding, while those falling short would not.

Achieving Housing Milestones: Municipality Successes and Funding Rewards

In addition to the baseline funding, municipalities that exceed their designated housing benchmarks will receive additional incentives. Premier Ford illustrated this with the example of Pickering, a municipality that is currently on track to significantly outperform provincial expectations, surpassing them by a remarkable margin of over 150%. If this trend persists, the city stands to gain access to more than $5 million in additional funding, as indicated by Premier Ford.

Strategic Funding: Disbursements and Infrastructure Investment for Housing

Beginning in the year 2024, the disbursement of funds will commence. Municipalities will have the flexibility to allocate these funds towards various housing-supporting infrastructure projects, encompassing activities such as site development, road construction, and the establishment of public utilities. These funds will also be directed towards other projects that can be swiftly implemented, all of which harmonize with the overarching objective of enhancing both housing and community development.

Equal Opportunity: Housing Initiatives for All Communities

It's important to note that the program has taken into consideration the concerns of smaller, rural municipalities that were not assigned specific provincial housing quotas. As a proactive measure, a dedicated portion of the program's funding, equivalent to 10% or an impressive $120 million, will be set aside to support housing initiatives within these communities.

Enhancing Mayoral Powers: An Extension of Authority for Housing Commitment

In a parallel announcement within the same speech, Premier Ford introduced an extension of the debated extensive mayoral authority to an additional 21 municipalities. However, this extension is contingent upon the pledge of these municipalities to adhere to the ambitious provincial housing objectives that have been set forth.

Auditor General's Report Fallout: Premier Ford's Response to Selection Process Critique

In recent times, the Ford administration has been grappling with the repercussions stemming from a critical report issued by the Auditor General. Released earlier this month, this comprehensive report meticulously outlined a selection process for Greenbelt lands that seemed to exhibit a distinct bias, favoring specific developers and landowners.

Bill 23 and Development Charges: Impacts on Ontario's Urban Landscape

In the closing months of the preceding year, the Ford administration ushered in Bill 23, widely known as the More Homes Built Faster Act. This legislative move resulted in the substantial reduction of development charges imposed by municipalities.

Mayoral Concerns and Property Tax Implications: Responding to the Reduction of Development Charges

Mayors representing the largest cities within Ontario have united in their appeal to Provincial authorities. Their collective call revolves around the reconsideration of the reduction in development charges. Many mayors are voicing concerns that the reduction in charges could potentially necessitate a corresponding increase in property taxes. Such a move would be critical to secure the requisite funding for pivotal infrastructure projects, including the creation of new roads and efficient sewage systems.

With the unveiling of the Building Faster Fund, the Ontario Government seeks to address the pressing need for accelerated housing construction. Amidst ongoing debates and challenges, this initiative not only aims to stimulate housing development but also to provide a framework for municipalities to achieve their housing targets while balancing the demands of sustainable growth.

Introduction:

In the realm of real estate, understanding the balance between supply and demand is crucial. One key metric that sheds light on this delicate equilibrium is the concept of "Inventory Months." In this comprehensive guide, we will delve into the significance of this metric, its calculation, and how it determines whether a market is in favor of buyers or sellers.

The Significance of Inventory Months:

Inventory Months, often referred to as "Months of Inventory," serves as a valuable supply metric that assesses the interplay between available homes for sale and their potential to be sold. By measuring this ratio, we gain insights into whether the real estate market is facing an abundance or scarcity of listings. This, in turn, provides a snapshot of the balance between demand and supply from an inventory standpoint.

Understanding Market Dynamics:

In economic terminology, the calculation of Inventory Months plays a pivotal role in identifying the market's status. An excess demand scenario arises when the quantity of homes sought by buyers exceeds the number available for sale at a given price point. This state, also known as a "shortage," translates to a seller's market in real estate, where sellers hold the advantage.

Conversely, an excess supply situation occurs when the quantity of homes demanded falls short of the available listings at a particular price. Termed a "surplus," this market state corresponds to a buyer's market in the real estate domain, granting buyers a stronger position in negotiations.

Calculating Inventory Months:

Calculating Inventory Months is a straightforward process that involves three steps:

1. Determine the total count of active listings from the preceding month.
2. Identify the total number of completed sales transactions for the same month.
3. Divide the number of active listings by the sales count to ascertain the remaining inventory in months.

Market Transition Thresholds:

A critical question often arises: At what point does a market shift from being buyer-oriented to seller-oriented, or vice versa? While this threshold varies from market to market, prevalent data suggests some general benchmarks. When Inventory Months is less than 4.0, sellers typically have the upper hand in pricing negotiations. Conversely, if the metric exceeds 6.0, buyers tend to have more negotiation leverage.

Real-Life Scenario: Canada's Market:

Currently, Canada's real estate market provides a tangible example of Inventory Months in action. With an inventory of 3.2 months, a slight increase from 3.1 in May and June, the market experiences growth of around 3.2%. However, this growth is outpaced by a 5.6% increase in newly listed properties. This dynamic underscores the challenge of maintaining equilibrium between supply and demand.

Conclusion:

Inventory Months stands as a vital metric that offers invaluable insights into the real estate market's health and dynamics. By grasping the concept, understanding its calculation, and interpreting the thresholds, both buyers and sellers can make informed decisions in navigating the ever-evolving real estate landscape. As demonstrated by Canada's market, the delicate balance between supply and demand underscores the need for continuous vigilance in assessing Inventory Months.

In July, Canada's Economic Landscape: Rising Inflation Rates and Market Dynamics

Canada's economic landscape experienced notable shifts in July, as rising inflation rates and dynamic market changes made their mark. This comprehensive analysis sheds light on key trends that shaped the economic scene, from surging mortgage costs to the impact of electricity and energy prices. Stay informed and gain valuable insights into these crucial economic fluctuations.

Introduction: Unveiling July's Economic Dynamics

July witnessed significant movements in Canada's economic indicators, with inflation rates taking center stage. This analysis delves into the intricate details of these shifts, highlighting the driving factors behind inflation and the influence of base-year effects on key sectors.

Surging Inflation Rates and Contributing Factors

Surging mortgage expenses and the upswing in gasoline prices were pivotal contributors to Canada's annual inflation rate increase. Statistics Canada's latest Consumer Price Index (CPI) reveals a rise from June's 2.8% to July's 3.3% year-over-year inflation rate. Notably, the mortgage cost index played a central role, surging remarkably by 30.6% annually. This surge was fueled by a growing number of Canadians opting to renew or initiate mortgages at higher rates. This surge follows a substantial 30.1% rise in June, marking the fifth consecutive month of record-breaking increases. Excluding mortgage interest costs, the headline CPI still demonstrated a noteworthy 2.4% rise in July.

Gasoline and Energy Prices: The Base-Year Effect

Gasoline and energy prices faced their own dynamics, influenced by the base-year effect. Despite a mere 0.9% monthly increase in July and a significant 12.9% yearly decrease, the substantial 9.2% drop in July 2022 no longer impacted the 12-month price trajectory. This shift exerted upward pressure on the year-over-year metric. Such nuances highlight the complexity of economic calculations and the factors driving them.

Electricity Prices: Base-Year Influence and Market Impacts

The base-year effect extended its influence to electricity prices as well. July saw an 11.7% annual surge in electricity costs, surpassing the 5.8% increase observed in June. A remarkable 127.8% increase in electricity prices within Alberta was a key driving force. The introduction of policy interventions in July 2022 led to a notable 24.4% monthly price reduction at that time. However, with these interventions ceasing, last year's price drop no longer affected the 12-month calculation. Similarly, natural gas prices experienced a 15.7% decline in July, a reversal from the 5.8% decrease in June. This shift was primarily attributed to a base-year effect in Ontario, where prices had risen by 22.6% on a monthly basis.

Energy and Grocery Prices: Emerging Trends

Overall, energy prices encountered an 8.2% reduction in July, following a 14.6% decrease in June. Grocery prices, although maintaining an elevated position, displayed a slower annual growth rate in July, rising by 8.5% compared to the 9.1% increase registered in June. This deceleration was largely influenced by the pricing of fresh fruit, which experienced a 4.1% annual rise in July, a notable drop from the 10.4% increase in June. On a monthly scale, prices experienced a significant decline of 6.5%, the largest drop since February 2008. This downturn was driven by a 40.9% fall in grape prices and a 1.8% decrease in orange prices.

Conclusion: Navigating Economic Changes

Stay informed about these dynamic market shifts as you navigate through evolving economic changes. Canada's economic landscape reflects the interplay of various factors, from inflation trends to the intricate impacts of base-year effects. By staying updated on these trends, you can gain valuable insights into the shifting economic terrain.

Transforming Pickering Town Centre Mall: CentreCourt's Ambitious Vision

CentreCourt, in partnership with Cowie Capital Partners Inc and Salthill Capital, is poised to redefine Pickering with a dynamic 55-acre community known as Pickering City Centre. This transformative endeavor, located at 1355 Kingston Road near the Brock Road interchange on Highway 401 and in proximity to Pickering GO station, will seamlessly integrate residential, retail, and public spaces. As the heart of Pickering evolves, its ties to the Greater Toronto Area will strengthen, solidifying CentreCourt's mission to establish this area as the authentic downtown of Pickering.

Revitalizing Pickering: A Decade-Long Urban Revival

CentreCourt envisions a vibrant urban hub emerging from the current mall site, a decade-long endeavor that will reshape Pickering's landscape. This visionary project introduces extensive residential, retail, and public zones, replacing the existing surface parking. Over ten mixed-use towers, ranging predominantly from 40 to 55 stories, will grace the skyline with over 6,000 residences. As Pickering Town Centre mall undergoes revitalization, a new era dawns for the region.

Block 1: Unveiling the Residential Oasis

In Phase 1, Block 1 will take center stage, featuring four residential towers comprising approximately 2,200 units and an impressive 111,483 m² of mixed residential and commercial space. These towers will also house a ground-level retail area spanning about 1,672m².

Elevated Living: Amenities for Every Lifestyle

Residents of Block 1 will revel in a lavish array of amenities, spanning approximately 4,552m² indoors and 7,246m² outdoors. This enticing offering encompasses a fitness center, rooftop pool, outdoor lounges with grilling stations, co-working and social spaces, a golf simulator lounge, and inviting interior courtyards that seamlessly connect with lush green spaces.

Discover more about this exciting development at pickeringcitycentre.com and witness the transformation firsthand. Your journey to the future of Pickering begins here.

Navigating the ever dreaded LOWBALL OFFER When Selling Your Home

Opinions vary regarding the definition of a "lowball offer." Some individuals consider it as an offer substantially below the listed price, while others perceive it as an offer significantly below the market value. In this blog, we will refer to "lowball offers" as those that are considerably below the asking price or below market value.

Receiving lowball offers can be disheartening but it is possible to handle them effectively. Here, we provide our top recommendations:

Understanding the Buyer’s Motivations

Gaining Insight into the Buyer's Intentions Before Responding to a Lowball Offer

When faced with a lowball offer, it is essential to comprehend the motivations driving the buyer. Typically, lowball offers originate from buyers in the following situations:

1. Bargain hunters: Some opportunistic buyers or investors are actively seeking a favorable deal and aim to purchase a property below its market value. They employ lowball offers as a strategy to identify sellers in desperate circumstances.

2. Budget limitations: Occasionally, buyers develop a strong affinity for a property that surpasses their financial capabilities. Although they may recognize the value of your home, their budget restricts them. As a result, they may submit an offer lower than your asking price, hoping for a fortunate outcome.

3. Renovation plans: Surprisingly common, certain buyers intend to renovate the property and deduct their estimated renovation expenses from the asking price. They may fall in love with a house but perceive the need to replace the kitchen and bathrooms, resulting in an offer lower than the listed price. It is important to note that personal renovation plans do not directly influence a property's market value.

4. Negotiation tactics: Some buyers, and their agents, relish the art of negotiation and utilize lowball offers as a means to shift the dynamics of the negotiation process. While their true intention might be to pay the market value, they engage in protracted negotiations as part of their strategy.

5. Lack of knowledge: Many buyers rely on their real estate agents to assist them in comprehending a property's value. Regrettably, not all agents possess extensive experience in property valuation. There have been instances where ill-informed agents have advised buyers to submit offers significantly below the asking price, leading to disappointment and frustration for both parties involved.

6. Genuine concerns about property value: While you may not necessarily agree with their perspective, some buyers may genuinely believe that your home is worth considerably less than your listed price. They may have reservations regarding its value, which drives them to present a lowball offer.

By understanding the motivations behind the buyer's offer, you can engage in more effective negotiations and potentially increase the chances of a successful sale.

Are You Priced Right?

Do you have substantial comparable sales data, indicating nearby properties with similar characteristics that support your asking price? Have you taken into account the prevailing market conditions?

HOMEBUYERS today are SMART! – they can quickly identify an overpriced residence, just as readily as they can recognize an underpriced one. If you're selling your home and have received numerous lowball offers, it may indicate that your price is set too high.

Don’t Take it Personally

While receiving a lowball offer can feel personal, it's crucial to keep in mind that buyers are primarily focused on securing the best possible deal for themselves. I've witnessed sellers react emotionally to such offers, refusing to engage in negotiations—I've even found myself in that position. However, if you can prevent yourself from becoming defensive, you'll enhance your likelihood of achieving a successful outcome.

Counteroffer with a Realistic Price

When faced with a lowball offer, it is crucial to respond with a counteroffer that reflects a realistic price. Take into account the present market conditions, recent comparable sales in the vicinity, and any improvements or renovations you have made to the property. Your counteroffer should be grounded in objective factors rather than emotions or a desire to retaliate against the buyer. Just because the buyer may be engaging in strategic maneuvers, there is no obligation for you to follow suit.

Be Willing to Walk Away

If the buyer demonstrates an unwillingness to engage in negotiations and presents an unfair price, you might need to consider withdrawing from the transaction. Certain individuals who submit lowball offers are solely seeking an advantageous deal and may never intend to pay the property's market value.

The Bank of Canada (BoC) caused a surprise in financial markets by increasing its policy rate by an additional 0.25% during the previous week. As a result, Canadian homeowners who possess variable-rate mortgages and/or home-equity lines-of-credit will experience a corresponding rise in their interest rates in the near future.

Bond-market investors had anticipated an increase in the Bank of Canada's policy rate at its upcoming meeting scheduled for July. However, the Bank chose not to wait until then and surprised the market.

In its policy statement, the Bank concluded that "monetary policy was not sufficiently restrictive." The following day, BoC Deputy Governor Paul Beaudry justified the decision by explaining that "excess demand in the Canadian economy is more persistent than we thought, and it increases the risk of the decline of inflation could stall."

Although the Bank had always kept the option open for further rate hikes if deemed necessary, the timing of their recent action and the rationale behind it left many market observers bewildered.

In January, the BoC said that it would take “an accumulation of evidence” to move it off the sidelines. In the end, it moved after only two policy-rate meetings.

The Bank is focusing on four key elements: 1) the evolution of excess demand, 2) inflation expectations, 3) wage growth and 4) corporate pricing behaviour.

1) EXCESS DEMAND - The Bank of Canada (BoC) noted that demand was unexpectedly robust and widespread. However, it did not explicitly acknowledge that a substantial portion of this additional demand can be attributed to the rapid depletion of savings accumulated during the pandemic. This temporary surge in demand is projected to diminish later this year, well before the effects of last week's rate hike become significant. It's important to note that rate hikes typically take effect with a delay and have an impact that lasts for approximately two years.

2) INFLATION EXPECTATION- The inflation expectations of both consumers and businesses continue to remain high, and this sentiment was not alleviated by the announcement that our Consumer Price Index (CPI) increased from 4.3% in March to 4.4% in April. It is possible that the Bank possesses information that is not yet available to the public. Although the most recent consumer and business expectation surveys are set to be released in July, Stephen Brown, Deputy Chief Economist at Capital Economics, confirmed that the Bank already has access to those findings (more details on this matter will be provided later in this post).

3) WAGE GROWTH - The overall nominal wage growth continues to maintain a pace of approximately 5% on an annualized basis. However, the Bank of Canada (BoC) has cautioned that unless there is a significant increase in productivity (which has been declining steadily), inflation will persist above the target level. On the other hand, real wage growth, which considers inflation's impact on nominal wage growth, remains below 1% and is still lower than pre-pandemic levels. Consequently, the average worker's purchasing power is barely improving. In other words, wage growth is unable to generate substantial excess demand. Additionally, there are indications that employment momentum is slowing. Job vacancies have been steadily decreasing over the past two quarters, labor force growth is surpassing the rate of hiring, and most recently, it was revealed that an estimated 17,200 jobs were lost in May. These factors collectively suggest an impending deceleration in wage growth.

4) CORPORATE PRICING BEHAVIOUR - Businesses tend to set prices based on market conditions, but it is primarily the limited savings buffer mentioned earlier that has enabled consumers to withstand higher prices without reducing their spending. However, this buffer is diminishing rapidly. As demand declines, profit margins will shrink rapidly, as there is less consumer spending to go around.

If the Bank of Canada (BoC) is expected to anticipate future trends when setting its monetary policy, why is it relying on indicators that reflect past conditions to justify another round of tightening, which will only have a significant impact a year or two from now?

I believe the decision to raise interest rates is driven by two crucial and interrelated objectives: 1) to manage inflation expectations and 2) to slow down the upward momentum of real estate prices.

Although inflation only rose slightly from 4.3% in March to 4.4% in April, it marked the first month-over-month increase since inflation reached its peak in June 2022. Many people may not delve deeper into the news beyond the headlines announcing the resurgence of inflation.

Implementing another rate hike attracts attention and helps to anchor inflation expectations.

More significantly in the current context, last week's rate hike will also dampen the momentum of our recently revived real estate markets. The Bank likely wanted to take action without further delay.

Real estate was expected to cool down for a period after the Bank of Canada implemented its most substantial series of rate hikes in modern history. However, the Bank's decision to pause in January unexpectedly fueled the market. When buyers learned that interest rates would no longer increase, they reentered the market, leading to excessive demand for limited housing supply.

Subsequently, the US banking crisis triggered a significant drop in bond yields, which in turn caused fixed mortgage rates to decline by 0.50% or more. Bidding wars resurfaced, and prices began to rise once again.

In its policy statement, the Bank of Canada acknowledged that "buyers were returning to the housing market, despite tight supply," and noted the "unexpected" strength in goods spending, particularly the demand for interest-rate-sensitive goods such as furniture and appliances, which are closely linked to home purchases.

The strong rebound in the real estate market significantly influences consumer inflation expectations, according to economist Stephen Brown, who recently highlighted the Bank's research indicating a strong correlation between house prices and consumer inflation expectations.

While the Bank's most recent rate hike did lead to a 0.25% increase in variable mortgage rates, the greatest impact was seen in fixed rates, which is the preferred choice for most borrowers nowadays. In a short span, three-, four-, and five-year fixed rates have surged by 0.50% or more, approaching their previous cycle peaks. Currently, this aligns with the Bank of Canada's intentions.

The favorable conditions resulting from the US banking crisis have now completely dissipated, with any expectations of rate cuts forgotten. Prospective homebuyers are once again concerned about the potential increase in near-term mortgage rates.

From the perspective of the Bank of Canada, their mission is accomplished for now.

So, what should you do if you are in the market for a mortgage today?

When the US banking crisis led to a decline in our bond yields, it created advantages for new borrowers opting for fixed rates, but it came at the expense of existing variable-rate borrowers. Lower fixed rates undermined the Bank's efforts to slow demand and consequently delayed the implementation of variable-rate cuts.

Fixed rates have become increasingly favorable for several reasons.

These rates are based on bond yields that had previously factored in the expectation of policy rate cuts by the Bank of Canada (BoC) and the Federal Reserve in the upcoming fall, despite BoC Governor Macklem publicly dismissing such a notion. Those who secured a fixed rate during a period when the bond market anticipated near-term rate cuts are currently benefiting from their decision.

Present-day fixed mortgage rates now reflect a viewpoint of prolonged higher rates. Currently, the bond market has aligned with the BoC's perspective.

Interestingly, each rate hike by the BoC increases the risk of excessive tightening. This raises the likelihood that, when economic slowdown accumulates and prompts a reversal in policy, the Bank may need to implement rate cuts sooner and more aggressively than it otherwise would have. Although this argument holds theoretical validity, it may be challenging for borrowers to let it significantly impact their decision-making, especially considering that variable rates are even higher now and the bond market believes additional rate hikes are not just possible but likely.

For the time being, I maintain the belief that the safest choice for individuals currently seeking a mortgage and aiming for a balanced approach is a three-year fixed rate.

Those who opt for this choice must accept the risk of potentially paying an above-market rate in the later part of their term. However, most borrowers view this as a trade-off worth making when the alternatives are longer terms (which amplify the risk) or variable rates and shorter-term fixed rates (which appear to be consistently rising).

The main point is that the increase in Government of Canada (GoC) bond yields led to lenders raising their fixed mortgage rates once again.

The recent surge in GoC bond yields suggests an expectation that the Bank of Canada (BoC) will likely increase its policy rates before the end of the year. Consequently, there may be a possibility of a near-term pullback following such a significant movement. This could result in fixed mortgage rates remaining stable at their new elevated levels for the foreseeable future.

Variable-rate discounts remained unchanged last week. However, the unexpected 0.25% hike by the BoC last Wednesday means that borrowers with variable rates will soon experience a corresponding increase in their borrowing costs.

Assisting your elderly parents in preparing to sell their house can pose challenges, particularly considering the physical and emotional strains they may face. Yet, with patience, effective organization, and unwavering support, you can facilitate a seamless and stress-free experience for them. Here are a few helpful tips to aid you in helping your parents prepare for the sale of their house:

Initiate a conversation with your parents regarding their motivations for selling their home, and make sure to genuinely LISTEN to their thoughts and concerns.

Gaining a clear understanding of your parents' motivations for selling their home is crucial in providing them with appropriate support. Are they seeking to downsize, relocate closer to family, or simply seeking a change of environment? Could new health considerations or accessibility requirements be driving their decision? Is there a shifting financial situation prompting the desire to sell? Although these conversations may become awkward or uncomfortable, and your parents may not readily disclose all the details, having insight into their true motivations will enable you to adapt your approach accordingly.

Ask them how they picture the process, you can gain valuable insights into their preferences and requirements. This will allow you to align your support with their desires and provide assistance tailored to their unique circumstances.

Anticipate that the sale, even if it doesn't involve the family home, will likely evoke strong emotions. Choosing to downsize or move to a permanent residence can be both thrilling and daunting, particularly when driven by health concerns or the fear of aging and diminished independence. It's crucial to understand how your parents envision the sale process. Are they interested in actively participating in the details, or would they prefer you to handle it on their behalf? Determine their preferred timing for the sale and the reasons behind it. Do they wish to remain in the home while it's listed, or would they prefer to relocate beforehand? Consider their needs, desires, and expectations from you. Additionally, discuss whether they would like other friends or family members to be involved in the sale and clarify their roles if applicable. By addressing these questions, you can better support your parents and ensure a smoother transition.

Assist them in decluttering, preparing, and staging the house.

Assisting your parents in decluttering and preparing their house can be a daunting task, especially for seniors. Offer your support by helping them sort through their belongings and assist in donating or selling items they no longer need. Additionally, you can contribute to staging the house by reorganizing furniture, decluttering surfaces, and adding simple embellishments like fresh flowers and scented candles to create a more inviting atmosphere.

Alternatively, consider involving a trusted REALTOR early in the process to streamline the house preparation and minimize stress. Reputable real estate agents have extensive networks and access to professional resources that can expedite the home-selling process. In fact, certain real estate teams in Toronto, including ours, provide in-house staging and design services as part of their commission. Remember, you don't have to tackle everything on your own, and it can be helpful to have a professional communicate any necessary changes, such as informing your mom that her cherished dining table may be too large for the room.

Assist with maintance tasks and minor repairs

Prior to selling their house, your parents may find it necessary to address minor repairs and maintenance tasks. These can range from fixing leaky faucets and painting walls to replacing broken tiles or addressing any other issues that may affect the overall condition and appeal of the property. Show your support by offering to assist with these tasks or arranging for professional help if required. By ensuring that necessary repairs and maintenance are taken care of, you can help your parents present their house in the best possible light to potential buyers.

Help them find the right real estate brokers

Finding the ideal real estate agent to assist your aging parents in selling their home can feel overwhelming. Given that your parents may not have sold a property in decades, or possibly ever, they might be surprised by the changes in the process. You can ease their burden by helping them select a reliable REALTOR. Start by conducting online research, reading reviews, and seeking recommendations from friends. Additionally, offer your assistance in reaching out to agents and participating in the interview process. Look for a REALTOR who specializes in working with seniors and comprehends their specific requirements. It's crucial to find someone who offers the essential services that align with your parents' needs and who respects and connects with all parties involved in the sale.

Help them navigate the paperwork, technology and legalities

Selling a house involves a significant amount of paperwork and legal procedures, which can be overwhelming for anyone, particularly seniors. While it's the responsibility of the REALTOR to ensure that your parents understand the sales process and the legal documents they are signing, don't hesitate to step in and request clarification or repetition from the agent if needed. If your parents feel too intimidated to ask questions themselves, be proactive and inquire on their behalf. Additionally, it's worth noting that many agents utilize electronic signatures for document signing, which may be intimidating or challenging for older individuals. Take the initiative to discuss any technology requirements during the sale process and inquire about alternative options available to accommodate their needs.

Support your parents