Interest Rate Impacts, Brookfield's Acquisition, and National Housing Updates

In this episode, the discussion kicks off with a welcome and a sponsor message from Real Approved Inc. The conversation then delves into the recent Bank of Canada rate decision and its implications for homeowners. Predictions from financial institutions regarding future rates and the importance of lender communication are explored. The episode examines the rise in fixed mortgage rates and bond yields. Brookfield's acquisition of First National Financial is discussed, followed by insights into Medallion Corporation's Vivant project and its alignment with the National Housing Strategy. The episode concludes with closing remarks and a sponsor mention from Real Approved Inc.

Episode Transcript

(00:00):
Welcome to the Ontario Mortgage & Real EstateInsights Podcast, your go-to source for the

(00:04):
latest developments, trends, and regulatorychanges in the industry.
I'm your host, Steve Hamoen, here to provideyou with insights sourced from reputable news
outlets to help you stay informed and makewell-informed decisions.
This podcast is brought to you by Real ApprovedInc., a trusted mortgage brokerage dedicated to

(00:26):
helping Canadians achieve their homeownershipdreams.
Visit realapproved.ca to learn more about howour experienced team can assist you with your
mortgage needs.
Let's dive into today's episode.
With the Bank of Canada's decision looming, thebig question on everyone's mind is whether
mortgage rates will remain higher for longer.
Few expect surprises from the Bank this timearound, as it's widely anticipated that they'll

(00:50):
hold rates steady.
This comes on the heels of rising inflationlast month and stronger-than-expected
employment data.
Janine, what are your thoughts on thispredictable decision?
Well, Steve, it's a bit of a mixed bag.
On one hand, holding rates could provide somestability, but for many homeowners, it's a

(01:12):
tough pill to swallow as they were hoping forsome relief.
The prospect of higher rates for longer iscertainly weighing heavy on those looking to
renew their mortgages or enter the housingmarket.
It's a challenging time for families trying tomake ends meet.
Absolutely, Janine.
Financial institutions like the Royal Bank ofCanada and Scotiabank are predicting that rates

(01:34):
will remain unchanged for the rest of the year,while others like TD, Canadian Imperial Bank of
Commerce, and Bank of Montreal foreseepotential cuts bringing the benchmark rate to
2.25% by January.
This uncertainty makes it crucial for mortgagebrokers to guide their clients carefully.
It's all about numbers and planning ahead,isn't it?

(01:55):
Indeed, Steve.
Max Singh from TMG The Mortgage Group has beenadvising clients to start conversations with
their lenders well before their renewal dates.
It's heartening to see the emphasis oncommunication from lenders, brokers, and
financial institutions.
This proactive approach can make a significantdifference for families trying to navigate

(02:18):
these uncertain waters.
And with fixed mortgage rates also on the rise,driven by increasing bond yields, homeowners
are facing the reality of higher costs.
The five-year Government of Canada bond yield,a key indicator for fixed rates, has climbed to
3.07% from just over 2.73% a few months ago.

(02:40):
For those looking at renewal, it might be wiseto consider breaking their current
lower-interest-rate term to avoid steeperincreases later.
That's a tough decision, Steve.
But it's one that could ultimately save moneyin the long run.
By planning ahead and staying informed,homeowners can better position themselves to
manage these costs.

(03:00):
It's not just about the numbers; it's aboutensuring that families can continue to thrive
despite these financial challenges.
Janine, let's talk about Brookfield AssetManagement's recent move to bolster its
Canadian mortgage business.
They've acquired a significant stake in FirstNational Financial Corporation.
This is a pretty hefty deal, valued at around1.2 billion Canadian dollars.

(03:24):
It's a strategic move by Brookfield to expandits presence in the mortgage sector.
What are your initial thoughts on this?
It's quite an interesting development, Steve.
First National is already a powerhouse in themortgage lending space, being one of the
largest non-bank lenders in Canada.
By acquiring a stake in such a well-establishedcompany, Brookfield is definitely positioning

(03:49):
itself to have a stronger foothold in theCanadian mortgage market.
This could lead to more competition, whichmight be beneficial for consumers in the long
run, especially in terms of mortgage optionsand rates.
Absolutely, Janine.
Brookfield's strategy here seems clear—they'relooking to leverage First National's existing
infrastructure and expertise to enhance theirmortgage offerings.

(04:11):
It's a classic move to strengthen theirportfolio and broaden their market reach.
Given Brookfield's global presence, this couldalso mean they're planning to introduce
innovative mortgage solutions that we might nothave seen in the Canadian market just yet.
Yes, and what's noteworthy is that FirstNational has a reputation for its strong
underwriting standards and customer service.

(04:33):
If Brookfield can maintain or even enhancethese aspects, it could be a win-win for both
companies and their clients.
Plus, with the current economic climate, havinga robust and reliable mortgage partner is
crucial for homeowners and buyers alike.
That's a great point, Janine.
It's also worth noting that this acquisitionaligns with Brookfield's broader investment

(04:57):
strategy.
They've been focusing on sectors with stablecash flows and growth potential, and the
mortgage sector certainly fits that bill.
As we move forward, it'll be interesting to seehow this partnership evolves and what new
products or services might emerge from it.
Indeed, Steve.
For potential homebuyers, this is a reminder ofthe dynamic nature of the real estate and

(05:19):
mortgage industries.
Staying informed and working closely withknowledgeable brokers can help navigate these
changes effectively.
It's an exciting time, and I think we'll seemore moves like this as companies try to adapt
and grow in our ever-changing market.
Next up, we're diving into an excitingdevelopment project in Toronto.

(05:41):
Medallion Corporation is moving forward withthe construction of Vivant on Bedford Park,
thanks to an $81.5 million federal loan.
This project is part of the Canada Mortgage andHousing Corporation's Apartment Construction
Loan Program, which is a key element ofCanada’s National Housing Strategy.
Janine, what do you think about thisinvestment?

(06:02):
Steve, it's heartening to see such asubstantial investment in rental housing,
especially in a city like Toronto whereaffordable housing is a significant challenge.
The Vivant on Bedford Park project promises todeliver 159 new rental homes, which is a
crucial addition to the housing market.
It's part of a broader effort to increaserental supply, which is desperately needed.

(06:26):
Absolutely, Janine.
This project is strategically located atBathurst Street and Douglas Avenue, in
Toronto's Ledbury Park neighborhood.
The location is ideal, with access to publictransit and local amenities, making it
attractive for potential tenants.
The federal loan, through the Canada Mortgageand Housing Corporation, is designed to support
the development of rental housing and addressthe ongoing supply issues.

(06:50):
And what's notable is that this funding is partof a larger $115 billion National Housing
Strategy.
The strategy has already committed over $23billion in loans to support more than 59,000
new rental units across Canada.
It's a comprehensive approach to tacklinghousing needs, focusing on both affordability

(07:11):
and social outcomes.
This project is a testament to what can beachieved with such initiatives.
The project also highlights the role ofMedallion Corporation in Toronto's housing
market.
They're planning to deliver six new rentalbuildings across the Greater Toronto Area,
which includes projects in Toronto, Ajax, andOshawa.

(07:33):
The Vivant on Bedford Park is just one piece oftheir larger vision to enhance the housing
supply in urban centers.
Indeed, Steve.
It's also interesting to note the flexibilityof the Apartment Construction Loan Program.
Recent updates have broadened its reach,allowing for applications that focus on
affordability and social outcomes rather thanstrict energy or accessibility requirements.

(07:58):
This adaptability is crucial in ensuring thathousing projects can move forward efficiently.
Right, Janine.
The Vivant project is expected to be completedby Fall 2027, and it's designed by Arcadis.
It will feature 159 rental units, with atwo-level underground garage providing ample
parking for residents and visitors.

(08:20):
The development will not only contribute to therental market but also stimulate the local
economy during its construction phase.
It's projects like these that remind us of theimportance of continued investment in housing
infrastructure.
By supporting developments that offer stable,affordable rental options, we can help ensure
that communities thrive and grow.

(08:42):
It's about creating a future where families andindividuals have access to the housing they
need.
Thanks for tuning in to another episode of theOntario Mortgage & Real Estate Insights
Podcast.
We hope you found today's insights valuable asyou navigate the world of mortgages and real
estate.

Before you go, a quick reminder (09:00):
Real Approved is here to make your mortgage journey smoother.
Whether you're buying your first home orrefinancing, their experienced team is ready to
guide you with personalized support every stepof the way.
Visit realapproved.ca to get started and takethe next step toward achieving your

(09:21):
homeownership goals. Catch you next time, and stay informed with the latest industry
insights!