Ottawa’s vacancy rates at all-time-high: Canadian real estate news for September 2

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Here are The Globe and Mail’s top housing and real estate stories this week, with the lowest mortgage rates available in Canada today, commentary from our mortgage expert and one home worth a look.

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Vacancy rates in downtown Ottawa hit all-time high as public service employees continue to work from home

Ottawa’s downtown core is seeing record-high vacancy rates, and real estate insiders say the federal government’s work-from-home policy is the culprit, reports Adam Stanley. The federal government is Ottawa’s largest employer, with more than 113,000 people working in the city, but many of them are still working remotely. In an effort to revitalize the downtown area, commercial real estate veterans are calling for the government to require its employees to return to the office.

Major mortgage insurer cuts back on disclosing information about homeowners with underwater loans

One of Canada’s major mortgage insurers has stopped disclosing numbers about the riskiest part of its balance sheet, where it has guaranteed mortgages for borrowers who now owe more than the value of their home, Rachelle Younglai reports. Until the first quarter of this year, Canada Guaranty Mortgage Insurance Co. disclosed the share of loans it guaranteed for borrowers who had a loan-to-value ratio greater than 100 per cent. Also known as an underwater loan, it means the principal of the loan is greater than the home’s market value.

The change in disclosure comes after The Globe and Mail published an article showing how Canada Guaranty and the other two mortgage insurers were increasingly guaranteeing underwater loans.

This week’s lowest available mortgage rates

Folks renewing their five-year fixed mortgage terms from 2018 are getting whacked with huge increases, writes Robert McLister in his weekly column. The overwhelming majority of floating-rate and renewing borrowers are now paying rates around 6 per cent or more, with lesser qualified borrowers north of 7 per cent. We might be approaching a point where the wheels come off for a critical mass of borrowers.

Borrowers at TD, BMO, CIBC see their mortgages balloon due to sharp rise in interest rates

The banks’ mortgage increase is the clearest sign of the fallout from the rising interest rate environment and the potential stress borrowers face when they are required to increase their monthly payments to get back on track with paying down their mortgages, Rachelle Younglai reports. This marks the first time BMO and TD have provided detail on loans that were increasing in size. Until now, the two banks did not disclose the information to shareholders, which suggested it was immaterial.

Home of the week: A 104-acre Pender Island sanctuary

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3200 Clam Bay Rd., Pender Island, B.C.

This 104-acre property, originally a farm dating back to 1874, has had many owners. An Air Canada pilot kept a small plane on the land and commuted to work at Vancouver International Airport, and another later built a biodynamic farm on the property, which features one kilometre of oceanfront, with rocky cliffs rising from a tidal beach.

Today the property includes the farm, vineyard, acres of untouched old growth forest, a pond, a sawmill, a water treatment plant and a powerful generator.

The most recent owner, U.S.-born investor Kiril Sokoloff, commissioned architects Kim Smith and Bo Helliwell to design a new primary residence on the land. Point House, finished in 2020, provides five bedrooms and six bathrooms in 6,603-square-feet of living space. A long driveway winds through the property to a house of stone, glass and wood designed with a combination of conventional framing and timber framing.