RBC’s Special Housing Report and Mortgage Tips You Need to Know

The Canadian housing market is shifting, and RBC’s latest special housing report confirms what many have already felt — sales are slowing, prices are softening, and affordability remains a challenge. But behind the headlines are real opportunities for buyers, sellers, and investors who know where to look.

In this article, we’ll break down RBC’s latest findings, explore why immigration changes are a game-changer for the market, and share real-life mortgage strategies that can make the difference between getting approved or getting declined.

RBC’s Housing Forecast: The Numbers Behind the Market Shift

RBC originally projected Canada would see over 500,000 home sales this year. That projection has been revised downward to about 467,000, a decline of roughly 3.5%. The dip is largely driven by weaker numbers in Ontario and British Columbia, which historically set the tone for the national market.

Immigration policy changes are also playing a role. A year ago, Canada had an open-door immigration stance, fueling population growth and housing demand. Today, that tap has been turned down significantly, reducing the demand pressures that have defined the market in recent years.

Prices are expected to fall modestly, RBC estimates about a 0.7% national decline. The benchmark home price, hovering around $815,000, remains historically high, meaning affordability challenges will continue even as prices ease slightly.

The Impact on Buyers and Sellers

Despite the headlines, the current market presents opportunities. More listings and slightly lower prices give buyers more negotiating power than they’ve had in years. Sellers, while facing a more competitive market, can take advantage of Canada’s mortgage portability rules to maintain favourable rates when moving to a new property.

Mortgage Strategies You May Not Know About

1. Using Pension Income to Qualify

Many believe pension income can’t be used for mortgage qualification. In reality, lenders treat pension income the same as employment income. One recent case saw a couple boost their borrowing power by $80,000 thanks to a parent’s $22,000 annual pension — enough to secure the home they wanted.

2. Reverse Mortgages for Retirement Cash Flow

For retirees struggling with property taxes or other expenses, reverse mortgages can free up cash without the need to sell. One homeowner, $50,000 behind on property taxes, was able to pay off the debt and secure extra funds to enjoy life without monthly mortgage payments.

3. Taking Advantage of Mortgage Rule Changes

Recent changes extending amortization periods and lower interest rates have made a big difference. For example, a couple looking at a $750,000 home saw their potential monthly payment drop from $4,900 two years ago to $3,700 today, a savings of over $14,000 annually.

4. Options for the Self-Employed

Traditional lenders often turn away self-employed borrowers due to unverifiable income. Equity-based lending offers a solution, focusing on the property’s value rather than reported income, making large purchases possible even without conventional proof of earnings.

Understanding Open vs. Closed Mortgages

Most Canadian mortgages are closed, meaning early repayment comes with a penalty. Fully open mortgages allow repayment at any time without penalty, an option worth considering for house flippers or anyone planning to sell soon.

Wrap Up

RBC’s special housing report signals a cooling market, but that doesn’t mean it’s all bad news. With the right mortgage strategies, from leveraging pension income to using equity-based lending, buyers and homeowners can still find significant opportunities.

If you’re feeling stuck, it might simply be a matter of knowing the right questions to ask and the right professionals to ask them to. As always, do your due diligence, review your financing options, and position yourself to make the most of a changing market.

Resources:

• RBC Special Housing Report

• Reverse Mortgage Webinar