Preconstruction buyers face hard truths and the Home of the Week: Canadian real estate news for April 6

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Here are The Globe and Mail’s top housing and real estate stories this week and one home worth a look.

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Ottawa announces $1.5-billion in funding for rental builds, $100-million for new construction technology

In the latest in a series of housing pledges ahead of the federal budget, the Trudeau government is launching a $1.5-billion fund to acquire existing apartment buildings, write Rachelle Younglai and Erin Anderssen. The Canada Rental Protection Fund is designed to save thousands of rental units from being sold and turned into higher-priced market units at a time when the cost of housing is far out of reach for low-income Canadian residents. Ottawa has also pledged $100-million towards supporting new and existing home building projects that focus on new materials and methods to construct new housing in the country. The Trudeau government has been under pressure to improve Canada’s increasingly unaffordable housing market.

Home prices could reach peak levels by next year, set new highs in 2026, CMHC report shows

The Canada Mortgage and Housing Corp. forecasts that despite an increase in rental housing coming on the market in 2023, supply is not forecast to keep up with demand, leading to higher rents and lower vacancy rates in the coming years. According to the report, affordability in the home ownership market will also be a concern for the next three years, as declining mortgage rates and the country’s strongest population growth since the 1950s will likely spur a rebound in home sales and prices.

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In some real estate listings, AI renderings make it hard to distinguish what’s real

A Toronto real estate listing with fantastical renderings generated by artificial intelligence has raised questions about what the limits are for digital photo manipulation, writes Shane Dingman. There were 21 photos in the original listing for the single storey Toronto garage: six show the actual building in its current state of bare brick and wood under peeling paint, and 15 show elaborate renderings depicting it as a residential or commercial space, generated by AI. Some images invent new spaces – pushing out the walls to create nooks for furniture – while others replace wooden rafters with steel beams and frankly an absurd amount of ductwork. The issue is when does “virtual” start to become misleading? Though Ontario real estate policy requires professionals to avoid misrepresenting a property, the meaning of the policy is often left to interpretation.

Rob Carrick: Retirees in debt have found an expensive way to get relief

An upstart player in reverse mortgages has a novel idea for broadening its business – give people credit card-style convenience in tapping their home equity, writes personal finance columnist Rob Carrick. The Bloom Home Equity Prepaid Mastercard from Bloom Finance Co. is designed for people who want to occasionally supplement their household income. Pay for something with the card and the amount is added to your reverse mortgage. The cost of this convenience is substantial. While there are no monthly payments on a reverse mortgage, a hefty interest bill quietly accumulates in the background and must be paid along with the principal when you sell.

A hard truth for real estate preconstruction buyers, as values haven’t caught up to expectations

Preconstruction purchasers of houses and condo units are facing the challenge of closing on a deal they signed when the real estate market was on a high and mortgage rates were at historic lows, writes Carolyn Ireland. While sales of condo units on the resale market have perked up in recent weeks, woes continue for buyers who bought preconstruction in the heady days between 2020 and 2022. Some are home buyers who struggle to line up the financing they need, while others are investors who are reluctant to take ownership of a property only to sell it at a significant loss. In certain cases, experts say, the market had soured to the point where the original buyer is willing to walk away from a deposit, and builders are then trying to find a new buyer.

Home of the week: A home of retreats, both outdoor and underwater

70A Hillside Dr. N., Toronto

This three-bedroom home at the edge of Toronto’s Don Valley was built with energy-efficiency in mind. Built in 2019 by the previous owner, who owns a company that specializes in water-based heating tech, the home features water heating throughout the floors, driveway, and garage. Most of the main level is styled in brilliant white or light grey, with an ultra-modern kitchen stocked with brushed metal appliances. The property has its own unique elements as well, including a glass-enclosed elevator and a huge, 30,000-litre freshwater aquarium — though it has never had fish. The best feature is the rooftop terrace, split between a glassed-in solarium and an open air deck, with sweeping views of the Don Valley.