Exorbitant building costs, and should parents charge their kids for rent? Canadian real estate news for July 1

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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.

The struggle of exorbitant building costs

Construction costs for residential real estate across much of the country are exacerbating Canada’s housing affordability crisis, reports Erica Alini. In 11 major Canadian cities, the cost of building homes and apartment complexes was up 54 per cent in the first three months of 2023 compared to 2019, StatsCan data shows. Labor shortages, the high cost of materials, and rising interest rates all contribute to high financing costs for developers.

Should parents ask their adult kids to pay rent?

With housing and rental costs on the rise, as well as high costs of living, many parents are trying to find a middle ground between financially supporting their children and empowering them to be “launched” into the world, reports Ana Pereira. Striking the right balance can lead to difficult questions around money: Should parents charge rent and if so, how much? How involved should parents be in their adult children’s finances?

This week’s mortgage rates: Unpredictable rate environment drives a three-year fixed market

Almost every leading one-to-five-year fixed rate rose ten or more basis points this week, reports Robert McLister. (One basis point is one-one hundredth of a percentage point.)

Government bond yields, which lead to fixed mortgage rates, have ridden a steady incline for almost two months. The drivers are bafflingly strong economic data and expectations of more central bank rates hikes.

Does Canada have an amortization crisis?

You might have heard of mortgage amortizations soaring to 60, 70 or even 90 years for homeowners with variable-rate mortgages. They paint a bleak picture, but Canada does not have an amortization crisis, McLister writes in his weekly column. why? Because all of these lengthy amortizations are temporary, he says.

Home of the week: A historic Victorian in downtown Toronto, with lots of room for shoes

74 McGill St., Toronto

Built in the 1880s, the Victorian is in a neighborhood of historic homes, near Yonge-Dundas Square and entertainment all around. The house, which sits on a 20-by 84-foot lot, features a back deck running the width of the house and a second floor taken up entirely by the primary suite. The third floor has three more bedrooms.