Good morning. Canadians who manage to step onto the property ladder are finding that second rung further and further away \u2013 more on that below, along with Donald Trump\u2019s latest plans for Cuba and Ottawa\u2019s ramped-up ammunition spending. But first:<\/p>\n
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Open this photo in gallery:<\/a><\/p>\n A home on the market in Toronto last month.Sammy Kogan\/The Globe and Mail<\/p>\n HousingLocked out<\/p>\n No one much wanted to buy a home in January<\/a>: It was viciously cold, and U.S. President Donald Trump started musing about 100-per-cent tariffs, so Canadian sales plunged to multiyear lows. No one much wanted to buy a home in February<\/a>: The snow kept piling up, and fixed mortgage rates remained steep, so sales across the country fell even further. March isn\u2019t looking any better: The weather still sucks<\/a>, and Trump doesn\u2019t seem to have an exit strategy<\/a> for the war he and Israel launched with Iran.<\/p>\n And the longer the war in the Middle East drags on, the likelier that mortgage rates at home will climb. Iran\u2019s stranglehold on the Strait of Hormuz has spiked energy prices, which could result in widespread inflation<\/a>, which would spur the Bank of Canada to raise interest rates. Some lenders are already pricing in the odds<\/a> of a rate hike. Victor Tran, a mortgage specialist for Rates.ca, told The Globe he works with providers who increased their fixed rates by 10 to 15 basis points in the war\u2019s first two weeks.<\/p>\n Economists didn\u2019t necessarily expect 2026 to be a banner year for home-buying. Markets remain expensive, including outside Canada\u2019s largest cities, while wage increases have been relatively modest. Still, softer housing prices, coupled with the central bank\u2019s 16-month run of rate cuts, were supposed to get demand moving again. <\/p>\n But the world (and Trump) had other plans. As Erica Alini, The Globe\u2019s personal economics reporter, writes in her latest analysis<\/a>, it now appears as though \u201cthis era of somewhat-better-but-not-nearly-good-enough affordability may be almost over already.\u201d Canadians hoping to actually land \u2013 or finally sell \u2013 their starter homes are largely left with nowhere to go.<\/p>\n Hard to get in<\/p>\n In late 2024, Ottawa introduced a mortgage rule meant to make it easier to afford pricier places to live, especially for buyers trying to crack the big-city markets. Suddenly, Canadians could purchase a $1.5-million home with a down payment under 20 per cent, rather than the previous price cap of $1-million. They\u2019d just have to pony up 5 per cent of the first $500,000 of the purchase price, plus 10 per cent of the rest.<\/p>\n Open this photo in gallery:<\/a><\/p>\n Even with the federal government’s relaxed mortgage rules, buying a first home in Vancouver isn’t easy.DARRYL DYCK\/The Canadian Press<\/p>\n Great news: To make the minimum down payment on a typical home, a medium-income household in Vancouver no longer has to save for 29 years. Bad news: They still have to save up for 11 years, according to recent data crunched by economists at National Bank. In Toronto, it now takes eight years. In Victoria, more like nine. And that\u2019s assuming the household sets aside 10 per cent of its pre-tax income every year.<\/p>\n \u201cBut don\u2019t be fooled,\u201d Alini writes. \u201cIn Canada\u2019s priciest markets, people with median incomes wouldn\u2019t be able to afford an average home with the smallest possible down payment anyway.\u201d In Toronto, for example, the minimum down payment for a typical home shakes out to nearly $85,000. That means buyers would put roughly $5,400 toward their mortgage each month \u2013 about 65 per cent of their income before tax. And housing affordability is only getting worse<\/a> in cities like Ottawa, Halifax and Montreal. Little wonder, Alini said, that homeownership remains out of reach for \u201ca young Canadian with a middling income and no family help.\u201d<\/p>\n Hard to get out<\/p>\n Condos used to be a common first step on the property ladder, but they\u2019ve increasingly lost their appeal. Condominium presales have collapsed and unsold inventory is surging, the Canada Mortgage and Housing Corp. said in a report last week<\/a>. Many young owners who purchased units as their starter home in the first years of the pandemic are now struggling mightily to sell. <\/p>\n And even if they do manage it, they\u2019re taking a considerable financial hit<\/a>. According to HouseSigma, condo owners in the Greater Toronto Area who bought in 2020 and sold in January netted a median loss of $18,700. Those who bought in 2021 lost $56,000. If they bought in 2022, they lost a whopping $116,000, or 19 per cent of the purchase price. <\/p>\n That doesn\u2019t exactly translate to the sort of savings people need for a new place with room to grow. As a result, \u201cour cities have a large cohort of young first-time buyers who are trapped<\/a>, having no way to move up into family-sized homes,\u201d writes Canadian economist Mike Moffatt. Ottawa might want to get moving on its pledge<\/a> to build more housing across the country. Perhaps Trump could work on an off-ramp for his war in Iran, as well. <\/p>\n The Shot\u2018We\u2019ll be doing something with Cuba very soon.\u2019Open this photo in gallery:<\/a><\/p>\n A bread vendor in Havana during the blackout yesterday.Ramon Espinosa\/The Associated Press<\/p>\n Donald Trump seems to have developed a taste for toppling other countries\u2019 leaders: The U.S. President is looking to push out Cuban President Miguel D\u00edaz-Canel, though it\u2019s unclear who he\u2019d like to see in power instead. Read more about the deliberations here<\/a>.<\/p>\n The WrapWhat else we\u2019re following<\/p>\n At home: Ottawa is spending $1.4-billion to ramp up<\/a> Canada\u2019s capacity to produce artillery, explosives and other ammunition. <\/p>\n Abroad: Top U.S. counterterrorism official Joe Kent resigned yesterday over the war<\/a> with Iran, blaming Israel for pulling the Trump administration into the conflict.<\/p>\n Law: The Canadian Medical Association has applied to intervene in a Supreme Court case<\/a> involving a Saskatchewan bill mandating parental consent for pronoun changes in school.<\/p>\n Order: After a 2021 wildfire destroyed Lytton, B.C., the village received inadequate support from the province<\/a> and was expected to lead its own recovery, B.C.\u2019s Auditor-General has found.<\/p>\n Media: Canadian entrepreneur Stephen Smith plans to buy a minority stake<\/a> in The Economist. <\/p>\n
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