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The Times, They are a Changin’

December 7, 2020

by: Don Bayer, President MonsterMortgage.ca


This is an opinion piece based on the questions clients have been asking over the past 6 months. Maybe a few will resonate with you. If not, and you have questions of your own, feel free to send them directly to me at Don@MonsterMortgage.ca.


What is going on with home prices in Southern Ontario?


Well, where do I start? First and foremost, with interest rates well under 2% and actually continuing to drop, affordability is at an all time high but availability is not. There are a few competing issues that many people face:

• CMHC (all mortgage insurers for that matter), will only insure mortgages on homes that are valued under 1 million dollars, and as you are aware with home prices increasing, there are less and less of these properties becoming available. This forces people out of Toronto.

• Everyone must qualify for a mortgage at the Bank of Canada’s “prescribed rate” which is currently 4.79%, this is 3% higher than today’s 5-year rate.


These are two of the principles that are forcing homebuyers to “drive until you qualify.” In addition, COVID has played a huge role in increasing the number of people that work from home, driving many home buyers to reconsider whether they need to live in close proximity to the amenities offered by urban centres like Toronto.


I for one, believe it is too early to call this a trend. Corporate headquarters are more than just a place to work – they’re physical embodiments of a company and its culture. Going “digital by default” is forcing many companies to use their head quarters as recruitment hubs or training hubs. Traditionally, people love and depend on the city for both work and play. There will come a time when things get back to a new normal and where living further away from the amenities offered by the city will once again come with more costs in terms of dollars and time (remember sitting in traffic jams?). What will happen when a vaccine becomes available and fears of moving around with the masses subsides? What happens when you are required to go back to work in the office in the city, even if only 2-3 days a week?