What interest rate hikes mean for renters, landlords, and variable mortgages: Canadian real estate news for July 15

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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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The latest interest rate hike is bad news for renters and some landlords

The implications of interest rate hikes reach far beyond homeowners with mortgages, reports Erica Alini. The Bank of Canada’s latest interest rate increase is expected to have widespread ripple effects for renters and real estate investors, too.

This is partially because high interest rates force would-be homebuyers to postpone a real estate purchase and continue to rent instead, the deputy chief economist at CIBC told Alini. And rates inching higher are likely to force some landlords to sell their properties. Even a small uptick in sales means fewer units available in a rental market where demand already far outstrips supply.

Variable-rate mortgage holders feeling the pressure after BoC announcement

The Bank of Canada paused its interest-rate hike campaign from February through May, which gave variable-rate mortgage borrowers a short reprieve from escalating costs, writes Rachelle Younglai.

With the latest increase from the Bank of Canada, borrowers with variable-rate mortgages face looming difficulties. The central bank’s summer interest-rate hikes will continue to stretch amortization periods, but with amortizations snapping back to their original lengths at renewal, many are in for inevitably higher monthly payments.

Copenhagen offers an example of how Vancouver could plan for the future

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Both Vancouver and Copenhagen are constrained geographically, and both are experiencing growth, writes Kerry Gold. Both cities are feeling the need for more housing supply, especially affordable housing.

While Vancouver is increasingly turning to towers to achieve housing supply, developers in Copenhagen have made creative moves that include refurbishing old silos for housing, as well as a 160-year-old industrial brewery district called Carlsberg Byen. Buildings in the district were largely repurposed, including the recycling of any demolished materials that went back into the new infrastructure.

The owner of the design studio behind the Carlsberg masterplan wants to remind planners that “new development demands so much from the people living there. They have to feel at home by recognizing an urban fabric they are familiar with.” People need plazas and gardens, places to meet each other – the life between the blocks of housing, he adds.

This week’s lowest available mortgage rates

Following encouraging inflation news north and south of the border, Canada’s five-year bond yield retreated from 4 per cent this week. It’s now down a whopping 30 basis points since its 16-year high on Monday, writes Robert McLister in his weekly column. That’s good news for fixed-rate mortgage shoppers. If this keeps up, we could see fixed rates edge down slightly by the end of next week. Variable rates, unfortunately, went up, he writes.

Upsizing from a condo to a house? Mind the price gap

At the opposite end of the housing spectrum from the downsizing boomer is the upsizing millennial or Gen Z, writes Rob Carrick in his weekly newsletter. Condos have long been thought of as a way for young adults to get started in the real estate market, but recent data suggests a reason for caution among people buying condos as a starter home.

With the real estate turnaround of early 2023, which favoured houses over condos, the price gap is growing, writes Carrick. Overall, houses in Canada are close to 40 per cent more expensive than condos, and cost more than double in 14 cities located in British Columbia and Ontario, plus Calgary.

Home of the week: Modern log cabin an homage to wood near Prince Edward County

971 Naphan Rd., Roslin, Ont.

From left to right, the rooms on the main floor almost seem to travel in time to the present: The living room/den has a massive fieldstone hearth and barnboard walls; the dining room is filled with tiger-stripe oak antiques and glass-globed brass lighting fixtures; and the kitchen evokes modern farmhouse with a huge granite-topped island over a playful turquoise lower cabinet, grey upper and pantry millwork and stainless steel appliances under a white-washed oak ceiling.

Along the back of the house is a hallway that connects the dining room, powder room and kitchen and has three exterior doors to the stone patio and side driveway and backyard. There are three more bedrooms on the top floor, and plenty of skylights to bring light into another lodge-like level filled with wood.