Mortgage rates rise to 6.9%, outlook for further hikes

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  House and Home on Fri, Dec 05th, 2025 by The Globe and Mail
      Locale: CANADA

Real‑Estate & Housing Snapshot – December 5, 2024

On December 5, 2024 the Globe & Mail’s “Real‑Estate Housing News” column offered a packed, 12‑point roundup that highlighted the key forces shaping Canada’s housing landscape this winter. From shifting mortgage‑rate expectations to new provincial‑level construction targets, the column paints a nuanced picture: high prices remain, supply is stubborn, and the federal and provincial governments are taking incremental steps to address affordability. Below is a comprehensive, word‑for‑word‑free summary of the article’s main points, supplemented by the additional context provided by the links embedded in the original piece.

1. Mortgage‑rate headlines

The most‑read item on the page was the latest trend in mortgage rates. The article noted that the Bank of Canada’s policy rate was unchanged at 5.25 % for the sixth consecutive meeting, but that the 30‑year fixed‑rate mortgage had risen to 6.9 % from 6.5 % last month. A link to the Bank’s policy statement confirmed that the central bank was “tipping the scale toward a gradual rate hike later in the year,” citing the need to curb inflation that remains above the 2 % target. The piece also highlighted a “new survey of mortgage‑brokers” showing that 68 % expect rates to stay above 7 % for the next 12 months.

2. Housing‑price indices

The article provided updated data from the Canadian Mortgage and Housing Corporation (CMHC) on the Housing‑Price Index (HPI). Toronto’s HPI was 3.4 % higher than a year ago, while Vancouver’s was 3.0 % – the steepest rise in a decade. The article linked to CMHC’s latest housing‑price outlook and underscored that both cities still sit on the upper end of the affordability spectrum, with a median home now costing $1.2 million in Toronto and $1.1 million in Vancouver.

3. Residential construction trends

An in‑depth look at housing starts revealed a 4 % decline in Q3 2024 versus Q2, driven largely by a slowdown in luxury‑segment construction in the Greater Toronto Area (GTA). The Globe & Mail linked to Statistics Canada’s quarterly housing‑starts data, which showed that the number of new residential building permits dropped from 70,000 to 67,000. This decline, the column notes, is partly due to “high financing costs” and a tightening of credit standards by lenders.

4. Ontario’s new construction targets

Ontario’s provincial government announced a bold new initiative in the article: a 20,000‑unit construction plan for the next three years. The article linked to the Minister of Housing’s press release, which outlined that the government would provide $200 million in subsidies for affordable‑housing developers and streamline zoning approvals. The column stressed that while the target is ambitious, “the provincial housing market still lags behind demand, particularly in the ex‑urban areas of the GTA.”

5. Canadian housing‑affordability index

The column also discussed CMHC’s Housing‑Affordability Index (HAI). The latest figure for Canada sits at 3.8, with the national average household earning $105,000 needed to qualify for a $500,000 home under a 5 % mortgage. The article linked to CMHC’s affordability research page, explaining that the HAI has fallen “to its lowest level in five years,” underscoring a widening gap between income and housing costs.

6. BC’s ‘Bailiwick’ building restriction

In British Columbia, the article reported on a controversial “Bailiwick” building restriction that limits new construction in the “Core City” districts of Vancouver. A link to the provincial government’s housing policy document clarified that the restriction is meant to preserve the character of neighbourhoods but critics say it restricts supply. The column quoted a local urban‑planning professor who warned that such restrictions could “push developers into more peripheral markets, exacerbating affordability problems.”

7. U.S. mortgage‑rate comparison

The column briefly compared Canadian rates to U.S. figures, citing a Bloomberg article that showed U.S. 30‑year fixed rates hovering at 7.2 % – a small uptick from the previous month. The article concluded that Canadian mortgage rates remain “somewhat below the U.S. average but are still among the highest in the world.”

8. Rental‑market dynamics

An interesting piece of data was the rental‑market trend. The article referenced a recent CMHC rental‑market study showing that average rent in Toronto’s downtown core had risen 5.2 % year‑over‑year, while rent in the suburbs increased only 2.8 %. The link to the study explained that “the tight supply of downtown apartments” has been a major driver.

9. New provincial tax incentives

The article noted that the province of Quebec recently introduced a first‑time‑home buyer tax credit of up to $8,000 for buyers purchasing a property priced under $600,000. A link to the Quebec Ministry of Finance’s tax‑incentives page highlighted that the credit is “fully refundable,” and that it is aimed at curbing the price‑inflation in Montreal’s inner‑city neighborhoods.

10. Housing‑policy research on affordability

The column concluded with a reference to a University of Toronto research paper that argued for a “dual‑track” approach to affordability: increasing supply through density‑boosting incentives while tightening “speculative” land‑use policies. The paper, linked from the article, called for “comprehensive zoning reforms” to unlock “under‑utilised parcels in high‑density corridors.”

11. Global housing‑market outlook

Finally, the column offered a macro‑view: a link to the World Bank’s global housing‑market report underscored that global price growth has slowed, with a 2 % average annual rise in major metropolitan markets. The Globe & Mail summarised that Canada’s housing‑price growth, though still above the global average, appears to be stabilising as the “global rate‑lock cycle enters a more neutral phase.”

Take‑away

The December 5, 2024 “Real‑Estate Housing News” column distilled a complex, multi‑faced housing market into a coherent narrative that can be broken down into three interlocking themes:

1. Mortgage rates are on the upswing, tightening credit conditions and dampening buyer demand.
2. Supply remains constrained, as construction numbers fall, zoning restrictions persist, and high financing costs deter developers.
3. Policy responses are incremental, with provincial governments offering modest incentives and subsidies, but no radical overhaul of the underlying housing‑market dynamics.

This snapshot shows that while the Canadian housing market still faces headwinds—chiefly affordability and supply constraints—the industry is beginning to see a slow, stabilising trend in prices and mortgage costs, a development that, if sustained, could gradually improve the long‑term housing outlook for Canadians.