From: Department of Finance Canada

News release

September 16, 2024 - Ottawa, Ontario - Department of Finance Canada

Canadians work hard to be able to afford a home. However, the high cost of mortgage payments is a barrier to homeownership, especially for Millennials and Gen Z. To help more Canadians, particularly younger generations, buy a first home, new mortgage rules came into effect on August 1, 2024, allowing 30 year insured mortgage amortizations for first-time homebuyers purchasing new builds.

The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, today announced a suite of reforms to mortgage rules to make mortgages more affordable for Canadians and put homeownership within reach:

• Increasing the $1 million price cap for insured mortgages to $1.5 million, effective December 15, 2024, to reflect current housing market realities and help more Canadians qualify for a mortgage with a downpayment below 20 per cent. Increasing the insured-mortgage cap—which has not been adjusted since 2012—to $1.5 million will help more Canadians buy a home.

• Expanding eligibility for 30 year mortgage amortizations to all first-time homebuyers and to all buyers of new builds, effective December 15, 2024, to reduce the cost of monthly mortgage payments and help more Canadians buy a home. By helping Canadians buy new builds, including condos, the government is announcing yet another measure to incentivize more new housing construction and tackle the housing shortage. This builds on the Budget 2024 commitment, which came into effect on August 1, 2024, permitting 30 year mortgage amortizations for first-time homebuyers purchasing new builds, including condos.

These new measures build on the strengthened Canadian Mortgage Charter¸ announced in Budget 2024, which allows all insured mortgage holders to switch lenders at renewal without being subject to another mortgage stress test. Not having to requalify when renewing with a different lender increases mortgage competition and enables more Canadians, with insured mortgages, to switch to the best, cheapest deal.

These measures are the most significant mortgage reforms in decades and part of the federal government’s plan to build nearly 4 million new homes—the most ambitious housing plan in Canadian history—to help more Canadians become homeowners. The government will bring forward regulatory amendments to implement these proposals, with further details to be announced in the coming weeks.

As the federal government works to make mortgages more affordable so more Canadians can become homeowners, it is also taking bold action to protect the rights of home buyers and renters. Today, as announced in Budget 2024, the government released the blueprints for a Renters’ Bill of Rights and a Home Buyers’ Bill of Rights. These new blueprints will protect renters from unfair practices, make leases simpler, and increase price transparency; and help make the process of buying a home, fairer, more open, and more transparent. The government is working with provinces and territories to implement these blueprints by leveraging the $5 billion in funding available to provinces and territories through the new Canada Housing Infrastructure Fund. As part of these negotiations, the federal government is calling on provinces and territories to implement measures such as protecting Canadians from renovictions and blind bidding, standardizing lease agreements, making sales price history available on title searches, and much more—to make the housing market fairer across the country.

Quotes

“We have taken bold action to help more Canadians afford a downpayment, including with the Tax-Free First Home Savings Account, through which more than 750,000 Canadians have already started saving. Building on our action to help you afford a downpayment, we are now making the boldest mortgages reforms in decades to unlock homeownership for younger Canadians. We are increasing the insured mortgage cap to reflect home prices in more expensive cities, allowing homebuyers more time to pay off their mortgage, and helping homeowners switch lenders to find the lowest interest rate at renewal.”

- The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

“Everyone deserves a safe and affordable place to call home, and these mortgage measures will go a long way in helping Canadians looking to buy their first home.”

- The Honourable Sean Fraser, Minister of Housing, Infrastructure and Communities 

Quick facts

• The strengthened Canadian Mortgage Charter, announced in Budget 2024, sets out the expectations of financial institutions to ensure Canadians in mortgage hardship have access to tailored relief and to make it easier to buy a first home.

• Mortgage loan insurance allows Canadians to get a mortgage for up to 95 per cent of the purchase price of a home, and helps ensure they get a reasonable interest rate, even with a smaller down payment.

• The federal government’s housing plan—the most ambitious in Canadian history—will unlock nearly 4 million more homes to make housing more affordable for Canadians. To help more Canadians afford a downpayment, in recognition of the fact the size of a downpayment and the amount of time needed to save up for a downpayment are too large today, the federal government has:

  • Launched the Tax-Free First Home Savings Account, which allows Canadians to contribute up to $8,000 per year, and up to a lifetime limit of $40,000, towards their first downpayment. Tax-free in; tax-free out; and,

  • Enhanced the Home Buyers’ Plan limit from $35,000 to $60,000, in Budget 2024, to enable first-time homebuyers to use the tax benefits of Registered Retirement Savings Plan (RRSP) contributions to save up to $25,000 more for their downpayment. The Home Buyers’ Plan enables Canadians to withdraw from their RRSP to buy or build a home and can be combined with savings through the Tax-Free First Home Savings Account.

As summer gives way to the crisp days of fall, September brings a host of exciting events to the Waterloo Region and Wellington County. Whether you’re a long-time local or new to the area, there’s no shortage of things to do this month! From festivals and markets to outdoor adventures, here are some of the top events to enjoy this September.

1. Kitchener-Waterloo Oktoberfest: September 27 – October 12

It’s that time of year again—Oktoberfest is just around the corner! Known as Canada's largest Bavarian festival, Kitchener-Waterloo Oktoberfest is a celebration you don’t want to miss. From traditional German food and music to exciting parades and cultural events, there’s something for everyone. Make sure to grab your tickets early for the festhallen, and join in the fun!

2. Cambridge Fall Fair: September 7 – 10

A long-standing tradition, the Cambridge Fall Fair is packed with family-friendly activities. Enjoy carnival rides, agricultural exhibits, a petting zoo, live entertainment, and more. It’s the perfect way to celebrate the end of summer and welcome the autumn season with your family and friends.

3. Guelph Jazz Festival: September 12 – 15

Music lovers won’t want to miss the Guelph Jazz Festival. Celebrating its 30th year, this event features world-class performances from local and international jazz artists. From intimate venues to larger outdoor stages, the festival offers a variety of experiences for both seasoned jazz enthusiasts and casual listeners.

4. Elora Fergus Studio Tour: Weekends, September 23 – 24 and September 30 – October 1

For art lovers, the Elora Fergus Studio Tour is a must-see event. This free, self-guided tour invites you to explore the studios of talented local artists, where you can watch them work and purchase unique pieces directly from the creators. The scenic drive between Elora and Fergus makes it the perfect way to spend a September weekend.

5. Doors Open Waterloo Region: September 16

Doors Open is a fantastic opportunity to explore some of Waterloo Region’s most historic and architecturally significant buildings. Many of these locations are not normally open to the public, making this event a rare chance to see behind the scenes. From heritage homes to innovative green buildings, it’s a great way to learn more about the area’s rich history and culture.

6. Eden Mills Writers’ Festival: September 8 – 10

Held in the charming village of Eden Mills, this renowned literary festival brings together readers and writers for a weekend of storytelling, readings, and workshops. The festival showcases some of Canada’s most celebrated authors and is a perfect outing for book lovers of all ages.

7. Stratford Garlic Festival: September 9 – 10

Just a short drive from Waterloo Region, the Stratford Garlic Festival celebrates all things garlic! From gourmet food and cooking demonstrations to garlic-themed products, it’s a unique culinary experience. Don’t miss out on the opportunity to taste, learn, and shop from local vendors showcasing this flavorful ingredient.

8. Guelph Farmers’ Market: Every Saturday

While it’s a year-round event, the Guelph Farmers’ Market is particularly special in September when local produce is at its peak. Wander through the market to pick up fresh fruits, vegetables, baked goods, and artisan products. Supporting local farmers and vendors is a great way to connect with the community while enjoying seasonal offerings.

9. Waterloo Central Railway Fall Excursions: Various Dates

Experience the beauty of fall in Waterloo Region with a scenic train ride aboard the Waterloo Central Railway. September offers various themed excursions, including the Fall Colours Train, which takes you through the picturesque landscapes of the region. It’s a fun and relaxing way to enjoy the changing seasons with family and friends.

10. Taste of Guelph: September 17

This annual fundraising event at the St. Joseph’s Health Centre is a culinary delight! Sample delicious food and drinks from some of Guelph’s best restaurants, breweries, and wineries. It’s a wonderful way to support a great cause while indulging in local flavors and meeting fellow food enthusiasts.

Final Thoughts

Whether you're looking to dive into local culture, enjoy some live music, or spend a day with family outdoors, there’s something for everyone in Waterloo Region and Wellington County this September. With so many fantastic events happening, it’s the perfect time to get out and explore everything this vibrant community has to offer.

If you’re thinking about making a move to the area, or just want to learn more about the neighbourhoods and amenities, reach out to Magnolia Group Realty. We’re here to help you find your dream home in this wonderful part of Ontario!

Back to School Safety Tips from Magnolia Group Realty

As the back-to-school season kicks off, our community is buzzing with excitement and new routines. At Magnolia Group Realty, we’re not only here to help you find the perfect home, but we also care deeply about the safety and well-being of families in our neighbourhoods. With kids heading back to school, it's the perfect time to remind everyone about key safety practices that can help keep our community safe.

1. Watch Out for School Zones

School zones are busy areas, especially during drop-off and pick-up times. Please be mindful of reduced speed limits and keep a lookout for crossing guards and children walking or biking to school. Avoid distractions like texting or using your phone while driving through these areas—safety comes first!

2. Be Aware of Bus Stops

School buses are back on the roads, and it’s important to follow the rules when sharing the road with them. Always stop when the bus is loading or unloading children, and give extra space around bus stops. Kids may be crossing the street unexpectedly, so it’s crucial to stay alert.

3. Drive Slowly in Neighbourhoods

Our neighbourhoods are filled with children walking, biking, and playing after school. Please drive cautiously, especially in residential areas where children may not always be visible around parked cars or driveways. A little extra attention can prevent accidents and keep our streets safe.

4. Teach Kids Street Safety

For parents, now is a great time to remind your kids about street safety. Teach them to use crosswalks, wait for signals, and look both ways before crossing. For kids biking to school, helmets are a must, and they should always ride on the right side of the road, following traffic rules.

5. Backpack Safety

It’s not just about road safety—backpack safety is also important. Ensure your child’s backpack isn’t too heavy and fits properly to avoid back or shoulder strain. Distribute weight evenly with padded straps and use both shoulder straps to reduce the risk of injury.

6. After-School Safety

Whether your children go to after-school programs or come home directly, establishing safe routines is essential. If they walk home alone, make sure they have a buddy and a set route. Discuss emergency plans and ensure they know how to contact you or a trusted adult if needed.

7. Stay Visible

As days grow shorter, visibility becomes more important, especially for kids who walk or bike to school. Make sure they wear bright or reflective clothing, and if it’s dark in the mornings, consider adding reflective tape to backpacks and jackets.

8. Get Involved in Your Community

Back-to-school season is a great time to connect with your neighbours and community members. Get to know the families around you and look out for one another, whether it’s walking kids to school or volunteering at local events. Stronger communities make for safer neighbourhoods.

Stay Safe, Stay Connected!

At Magnolia Group Realty, we believe that a safe community is a happy community. By following these simple safety practices, we can all do our part to ensure that this school year starts off on the right foot. Let’s work together to keep our kids and streets safe as they head back to the classroom.

If you’re new to the area or thinking of making a move, we’re here to help! Contact Magnolia Group Realty for expert guidance on finding a home in a safe, welcoming neighbourhood.

The First week of back-to-school season is a time of excitement and adjustment for families. New routines, fresh starts, and, for many, thoughts about where they’ll be living long term. This period can often trigger real estate decisions as families evaluate whether their current home fits their needs or if it’s time for a change.

Here’s why the first week of school is such a pivotal time in the real estate world:

1. School District Priorities

The first week back in the classroom often shines a spotlight on the importance of being in the right school district. Families start to realize how their home’s location impacts their daily commute, access to after-school programs, and the overall educational experience. For home buyers, this is a prime time to search for homes in preferred districts. For sellers, marketing your home as part of a top-tier school district can be a significant advantage.

2. Settling into Routines

As families settle into their back-to-school routines, they may find themselves rethinking their living situation. Is the house layout working for a busy school year? Is there enough space for homework, projects, and extracurricular gear? The first week back often reveals whether a family’s current home is truly meeting their needs, prompting some to explore new housing options.

3. New Beginnings Spark Home Searches

The first week of school brings a sense of new beginnings, and for some families, this is the perfect time to start their home search. Buyers often use this time to focus on finding a home that will better serve their family’s needs for the rest of the academic year and beyond. For sellers, this is a great time to attract motivated buyers who want to settle in before the end-of-year holidays.

4. Less Competition in the Market

While the summer months are often the busiest for real estate, the first few weeks of the school year can present unique opportunities for both buyers and sellers. The rush of summer buyers may have slowed, but those still in the market are often serious about finding a home quickly. This can lead to smoother transactions and less competition for the right property.

5. Showcasing the Community

During the first week of school, neighbourhoods come alive with activity as families settle into their routines. For those selling their home, this is an ideal time to highlight the community's appeal—whether it's the proximity to schools, parks, or family-friendly amenities. Buyers are looking for homes that fit their lifestyle, and the first week of school helps them visualize what life in a new neighbourhood could look like.

Final Thoughts

The first week of back-to-school season is more than just a return to classrooms—it’s often a catalyst for real estate decisions. Whether you’re looking to buy, sell, or reassess your living situation, this time of year offers opportunities to make a move that aligns with your family’s needs.

If you’re thinking about making a change, reach out to us! We can help you find the perfect home for your family as you settle into the new school year.

Door could be open for 'more aggressive' rate cuts, says BMO's Porter

By Fergal McAlinden

05 Sep. 2024

There were no surprises in the Bank of Canada’s decision to lower its benchmark interest rate yet again in yesterday’s announcement – but the door could be open for the central bank to be even more aggressive in cutting rates in the coming months.

That’s according to Bank of Montreal (BMO) chief economist Doug Porter (pictured), who told Canadian Mortgage Professional that a recent change in market view on the US Federal Reserve’s likely approach to rate drops had cleared the way for Canada’s central bank to continue cutting.

Fed chair Jerome Powell gave his clearest indication yet that lower rates are on the way in comments delivered at its annual retreat in Jackson Hole, Wyoming on August 23, meaning there’s little risk of a divergence between the Canadian and US central banks’ approaches. “With the Fed essentially about to move in lockstep, or close to it, it’s really made it easier for the Bank of Canada to cut rates too,” Porter said.

“That was really the last constraint on the Bank of Canada. The inflation numbers are coming in as they expected, if not even a little better. The unemployment rate is backing up. So there’s lots of justification for the Bank to cut interest rates, and it certainly seems they’re primed to do more.”

Is the Bank of Canada worried about inflation falling too far?

Yesterday’s move meant the Bank has now reduced its overnight rate by 75 basis points in three consecutive quarter-point cuts since the beginning of June – and comments delivered by Governor Tiff Macklem after the announcement, Porter said, suggested the inflation outlook could be giving decisionmakers cause to consider even bigger individual cuts looking ahead.

Macklem mentioned the risk of inflation falling too low and said the Bank cares “as much” about inflation drifting below its 2% target as about it being above that figure. With inflation currently back to normal, “and given that rates are well above normal, that gives the Bank lots of leeway to cut interest rates,” Porter said.

“There’s all kinds of talk about the Federal Reserve cutting in 50-basis-point increments, maybe not with their first cut [in September] but at some point this year. So if that were to be the case, that really opens the door for the Bank of Canada to move faster.”

What impact would an oversized cut have on the housing market?

The mortgage and real estate industries are still awaiting an uptick in housing market activity following the Bank’s first two rate cuts of the year. Homebuying remained sluggish in July, according to the Canadian Real Estate Association (CREA) – but while more aggressive cuts by the Bank wouldn’t necessarily light a fire under the housing market, they could certainly help spur a resurgence of sorts, according to Porter.

An oversized rate cut down the line, he said, “might jolt [the market] out of its slumber. The reality is the longer-term mortgage rates already reflect the expectation that the Bank will continue trimming interest rates but if they started chopping them quickly, maybe in half-point cuts or even more, that would come as a bit of a surprise to the market and would probably lead to some downward pull in the longer-term interest rates.”

While the current pace of rate drops looks set to keep a floor under the housing market, it would take a “surprisingly deep” cut by the central bank to shake the market into life, Porter argued.

After maintaining hawkish language in its approach to interest rates as it battled against stubbornly high inflation throughout 2022 and 2023, the Bank has adopted a milder tone in recent announcements.

Royal Bank of Canada (RBC) economist Claire Fan, writing yesterday morning, highlighted Macklem’s “dovish” opening statement to reporters following the rate decision and his comfort in discussing the likelihood of future rate cuts.

The stage is set, she said, for another rate drop at its next announcement, scheduled to take place in October. “Despite some pockets of sticky price growth… the tone from the BoC has clearly shifted,” Fan wrote, “to worrying about a gradually but persistently weakening [economy].”

Third time's the charm, but is it enough to bring homebuyers back to the market?

By Candyd Mendoza

05 Sep. 2024

The Bank of Canada (BoC) made its third consecutive interest rate cut on Wednesday as it works to balance inflation control with stimulating economic growth.

The central bank lowered its benchmark rate by 25 basis points to 4.25% during its September 4 meeting. BoC officials left the door open for more cuts in the coming months while cautioning against the risk of inflation falling below the 2% target.

Economists are forecasting additional rate cuts before the end of the year, with markets pricing in a 93% chance of another 25-basis-point cut in October, followed by another reduction in December. Some analysts have suggested that a larger 50-basis-point cut may be possible if economic growth continues to weaken.

Governor Tiff Macklem said the BoC’s governing council had discussed the possibility of a larger cut but opted for the smaller adjustment as there are still inflationary pressures, particularly from high shelter costs.

“It is reasonable to expect further cuts in our policy rate,” Macklem said.

“As inflation gets closer to target, we want to see economic growth pick up to absorb the slack in the economy so inflation returns sustainably to the 2% target. We care as much about inflation being below the target as we do above.”

Impact on mortgage rates

Following the decision, experts in the housing and mortgage sectors shared their thoughts on how it could affect homebuyers and the broader market.

Penelope Graham, a mortgage expert at Ratehub.ca, pointed out that fixed mortgage rates, which are influenced by bond yields, have already been trending downward.

According to Graham, five-year bond yields are hovering in the 2.9% to 3% range, which will help keep fixed mortgage rates low. Variable mortgage rates will also continue to drop as lenders adjust their prime rates.

"Borrowers have now received a cumulative 75-basis-point reduction since June, which will lower variable mortgage rates further," Graham said.

“The previous two rate cuts we received in June and July did very little to move the dial on real estate demand, as prospective home buyers wait for mortgage rates to fall further. Now that we’ve received a cumulative 75-basis-point reduction, that could start to incentivize buyers to return to the market, as we’ll certainly start to see this reflected in lower mortgage costs.”

However, Clay Jarvis, a mortgage expert at NerdWallet Canada, said the rate cut may not be enough to significantly shift the housing market.

"The Bank’s latest rate cut will make things a little easier for mortgage shoppers committed to variable rates, but it’s not going to resuscitate the housing market,” said Jarvis. “Significantly lower fixed rates have been available all year, so if buyers aren’t succeeding, it’s probably due to other factors.

“High home prices, increased debt loads, diminished savings, worries about the economy — a slight dip in variable rates doesn’t lower any of these barriers to the market."

Read next: Top broker on what will happen to interest rates

More cuts expected

Some economists suggest that weaker-than-expected growth could lead to a larger 50-basis-point-cut at its next announcement, though the central bank opted for a more conservative approach this time.

On the housing front, don’t expect an immediate uptick in activity. “There’s strong anticipation of further cuts to come, many buyers may stick it out a little longer, especially as many of Canada’s housing markets remain very well supplied, and favourable towards buyers,” Graham added.