Real estate influencers, Canada's unfair recession and the U.K. crisis: Must-read business and investing stories

• By Mike Heddle
• Posted Monday, Oct 24, 2022 10:07 am

Real estate influencers, Canada's unfair recession and the U.K. crisis: Must-read business and investing stories

Are you financially ready for a recession?

The recession we’re heading into may be the most unfair in history. Never has there been such a clear dividing line between those who can arm themselves with savings and those who can’t afford to, writes Rob Carrick. During pandemic lockdowns, many Canadian households were able to stockpile cash, while others eked by and never built cash reserves or have since spent those savings. Keeping a stockpile of cash protects you against the interrupted incomes and job losses that are inevitable in recession as employers react to a weakening business environment.

Higher payments are coming for homeowners with variable-rate mortgages

If you’re a Canadian homeowner with a variable-rate mortgage, you may not be sleeping very soundly these days. With soaring interest rates, banks are contacting many clients to inform them that they’re reaching their trigger rate, signalling higher monthly costs for a growing number of homeowners and a longer payback period. As Salmaan Farooqui reports, the vast majority of Canadian variable mortgages have fixed payments, meaning that payments stay the same even as interest rates rise moderately. But because interest rates have climbed dramatically this year, variable mortgages are starting to hit what’s known as the trigger rate – the rate at which the monthly payment would not be enough to cover the interest owed. So with the Bank of Canada widely expected to announce another outsized rate increase before the end of the month, is it time to switch to a fixed-rate mortgage? Erica Alini explores the pros and cons of locking in a fixed rate versus riding it out.

Renters: Be prepared to compete – and pay more

Bidding wars and bully offers are no longer reserved for homebuyers. After seeing falling rent prices during the pandemic, competition is intense in the Greater Toronto Area’s red-hot rental market as the region continues to struggle with a severe housing shortage – and if you do happen to come out on top, be prepared to pay a premium. According to Urbanation data, a record 36 per cent of GTA condos were leased for above the listing rate in the third quarter, and on average, those condos were rented for a $129 monthly premium over asking, also a record high. The average condo was leased for $2,733 a month, an increase of 18.6 per cent from a year ago. Will this trend continue or can renters expect...[READ MORE]