The Truth About Real Estate in the News
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Debunking Today’s Real Estate Myths
There has been a lot of negativity in the news cycle for the last several months, stoking fear and uncertainty about the real estate market. People claim that the market is crashing and will never recover, that things have reached a point of no return, and that the market is full of bankruptcies and failures to close—but we are here to set the record straight.
At the same time, we want to remind current and future homeowners to be wary of anyone who only focuses on the negative, doesn’t do any research, or takes a short-term view of real estate. They should especially be careful when listening to people who are not real estate professionals. These people may not have the most expert opinion or credible data, but are merely the loudest voice in the room or on the internet.
We witness market changes every year. There are highs and lows, but regardless of how the market behaves, we make sure our clients are prepared for anything because we take a long-term approach to buying and investing in real estate. We are fully aware of how the market has behaved and how it will shift because everything is cyclical. What happened today happened yesterday and will happen again tomorrow.
Not only are we market experts with over 20 years of experience, but we also have strong connections to the entire real estate industry, dealing with clients and developers every day. We are a full-time team of agents who breathe, sleep and eat real estate. We are passionate about using our expertise and connections to help people achieve their real estate goals and enjoy long-term success while doing so.
Part of this mission involves removing barriers like misinformation and fear-mongering so clients can confidently navigate the market. This is why, in this article and future articles, we will start directly addressing some of today’s fake news and dispelling myths currently floating around.
Myth #1: 30% of Condo Buyers Are Failing to Close
Having averaged selling 500 pre-construction condo units annually for the past 10 years, we can confidently say that developers cancelling projects are rare, and buyers failing to close are rarer still. In fact, of the handful of instances when a buyer has chosen not to complete a sale with us, it was due to a major life change (e.g., death, relocation, job loss), not because they had purchased intending to speculate within the market and never close.
This is also because we always guide our clients to long-term success in their investment ventures and would never suggest short-term speculation.
We work closely with clients and developers to ensure each sale succeeds. When a client struggles to meet a particular deadline, we can request an extension from the developers. Recently, every developer we have spoken to assured us that the closing ratios for their projects are high.
What’s important to note is that in almost every case, all parties are motivated to ensure the purchase goes through and will do what they reasonably can to help ensure that happens. As a matter of fact, we can count on one hand how many of our clients couldn’t close in the last 3 years.
Myth #2: Put Less Than 20% Down So Banks Will Give You Better Rates
Some mortgage brokers and lenders have perpetrated an enormous lie. They have suggested that if buyers purposefully use a smaller-than-average down payment and pay for CMHC mortgage insurance (which is mandatory for down payments under 20%), banks will perceive these loans as “safer” and offer these buyers a much lower interest rate on larger loan-to-value ratios. This is wrong.
Banks are not solely looking at down payment sizes to determine the lending rate they will offer you. They look at your income, credit history, and debt-to-income ratio, getting a comprehensive view of your financial status and ability to repay your loan over time.
Any “risk” they face of you being unable to pay your loan is offset by the home value itself, not by CMHC insurance. If you don’t pay your mortgage, they have the right to sell your property under a power of sale and recoup their losses. In this way, the bank is always protected from default risk.
If you do not need to pay for CMHC insurance, avoid it because it will add to your monthly costs and provide no additional benefit to you. You can do the math: if you were to put less than 20% down, you would have to pay CMCH insurance, which ranges from 0.60% to 4.5% plus tax, which adds thousands of dollars to your housing costs.
The only reason someone would push you to put less than 20% down when you have the funds to put 20% down is that they are getting some sort of benefit from it, not you. Mortgage brokers are paid based on the loan size you sign up for, so if you request a 90% loan instead of an 80% loan on a $500,000 property, they will get paid more. The lender, too, will gain more over time as you pay them more interest on your larger loan.
Despite this misinformation controversy, the CMHC does offer a great program to help buyers who have less than a 20% down payment break into the market earlier. However, you should use it with a full understanding of the long-term costs. Ultimately, if you have more money to put down, you should definitely do it instead of paying extra fees like CMHC insurance.
However, there is one important exception to note. You can get lower rates for investing in multifamily homes (with 5 units or more) that are insured by the CMHC. Typically, for buildings with more than 5 units, you would need a commercial mortgage and a larger down payment, like 25% down, but the CMHC offers preferred rates for eligible multifamily home projects.
One specific program, the CMHC MLI Select Program, allows you to receive a lower interest rate than regular residential and commercial rates with less money down while still giving you the power of leverage. This program is available to help build the type of multifamily housing Canada needs the most: affordable rentals, student housing, and retirement housing. The CMHC MLI Select Program allows you to invest in multifamily buildings with only 5% down and offers extended amortizations for up to 50 years and reduced interest rates.
But What About Today’s Market?
Some people have questioned why housing prices are coming down and why inventory is going up. Simply put: it’s supply and demand.
Higher-than-average pre-construction sales in 2020 and 2021 have resulted in higher-than-average building completions in 2024 and 2025. This has flooded the market with units at a time when sales activity is slow, so units being put on sale or made available for lease are taking a little longer than usual to be absorbed by the market. Because of this, prices have come down in both the resale and rental markets.
For the past two decades, whenever a building is completed, about 40% of units are made available for lease, and it takes around 1 to 3 months for a renter to occupy them. With so many units in the same building on the market, rents are usually cheaper as there is more competition. This is normal and expected.
The vacancy rate in the GTA is about 3.5% — anything below 5% is considered a favourable vacancy rate, as it means rentals are in high demand. In fact, the founder of GTA-Homes and other GTA-Homes agents have closed on properties this year and found tenants within 1 week! While the other properties are still waiting to be occupied, with the assurance of low vacancy rates in the city, they are not a concern for someone taking a long-term view of real estate investments.
Today, we’re seeing a lot of inventory and lowered prices in resale and rental markets, but in 2026 and onwards, the housing market will be hit hard. We won’t even meet 25% of the housing supply needed, and the gap between supply and demand will grow wider and wider. It’s more important than ever for action to be taken today.
The Long-Term View
The most crucial perspective shift that many prospective buyers and investors need is to realize and remember that real estate is a long-term process that will reward you over time. Your goals and dreams of homeownership will not be realized overnight; you will need to plan out your finances and buy with the intention to hold, as your investments will appreciate over time.
Be aware that the market will constantly change. Political and economic shifts will always happen. Don’t be swayed by tariff and trade talks today because something new will always be in the news cycle, making the future seem uncertain. There will never be a good time to buy based on outside forces; the best time to buy is based on you.
When you buy real estate, you will have your foot on the homeownership ladder, which is the first step in long-term security. You will begin building home equity, and at the end of your mortgage amortization, which can be 20 to 30 years, you will own your home outright, and it will have increased in value over those decades. Looking at how real estate pricing has changed over decades, not just months or years, we know that the value grows steadily and consistently.
If you do not buy property, those 20 to 30 years will pass anyway, and you will have paid other housing costs like rent and have nothing to your name at the end. And what will the market look like at that time?
What Will The Real Estate Market Look Like in the Future?
We can see that the market will become more challenging for first-time home buyers in the next couple of decades unless they take the opportunity today. The GTA, where 70% of homes are owned and 30% are rented, is on track to become much like New York City, where the majority of residents are renters (70%) and there are very few homeowners (30%).
Several factors contribute to New York City’s rental-dominated housing landscape, including:
- High Property Prices: The median value of owner-occupied housing units in NYC is significantly higher than the national median, making homeownership less accessible for many residents.
- Abundance of Rental Units: The city has a vast supply of rental housing, including a substantial number of rent-regulated apartments, which provide more affordable options for tenants.
- Urban Lifestyle: The convenience of renting in proximity to work, public transportation, and amenities aligns with the lifestyle preferences of many New Yorkers.
The same conditions are already in place for Torontonians:
- High property prices: Expensive homes are making homeownership less accessible for first-time home buyers today.
- Abundance of rentals: The government is set to build over 200,000 rental units in the next 2 decades
- Urban lifestyle: People want to live close to jobs, schools, transit, shops, and entertainment in a densely packed city.
Another factor to keep in mind is that immigration will not stop. While the government dropped its immigration targets for the next few years from nearly 500,000 people a year to under 400,000 a year, this was to right a previous wrong of having too many people coming in. Canada relies on immigration to grow its economy. Without a constant flow of newcomers—specifically 1% of the population annually—the country’s GDP will drop.
This population increase is why we constantly require more homes, and prices will not stay down for long in the face of ongoing demand and not enough supply.
Anyone currently thinking of buying or investing but has felt scared or overwhelmed by the news cycle should focus on how real estate will impact them and not how the news impacts real estate.
We can walk you through every step of the home-buying process and ensure you are set up for long-term success. Connect with us today! Call Stan at 604-202-1412.
