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Mortgage stress test takes a toll on Toronto renters, too

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Photo: Rebecca Siegel/Flickr

Mortgage stress tests aren’t just affecting would-be homebuyers in Canada. Renters, even those with no intention of buying any time soon, are facing increasing rents in Toronto as a result of the federal policy, a popular real estate analyst suggests.

“It’s been unbelievable [rent] growth… essentially since they put in the new B-20 rules, right, the new stress test which has reduced credit availability in the marketplace and forced people to rent for longer,” Ben Myers, founder of Bullpen Consulting, a firm that advises developers and land owners, tells Livabl.

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At the onset of last year, the federal government expanded stress testing to apply to uninsured mortgages. This means that a mortgage applicant looking to borrow from a big bank has to qualify at a higher rate than they are applying for — even if they can cobble together the 20-percent downpayment needed to avoid insuring a loan from many financial institutions.

While the impacts on homebuying aspirations are obvious, a knock-on effect has been that renters in Toronto have been feeling the pinch: would-be homebuyers rent for longer, putting pressure on the city’s already drum-tight vacancy rate.

“People still need to live somewhere,” says Myers. “It’s not, ‘OK, I live with my parents or I buy a home’ — there’s something in the middle there, and so it’s going to have an impact. They’re not buying — as you can see there’s been a huge decline in the number of transactions in the housing market — so where is that demand going? Well, it’s been going to the rental market.”

That’s one of the main reasons Myers is forecasting rents to increase this year by 11 percent in the old city of Toronto and 10 percent in neighbouring Mississauga, a one-time suburb that has grown into a city of its own.

According to a monthly report that Myers recently penned for rentals.ca, the average rent in November for a one-bedroom apartment in Toronto was $2,144, up 1 percent from the previous month and roughly in line with the rate of growth projected for this year.

On a per-square-foot basis, Myers has seen rents in some buildings increase by an eye-popping 20 percent.

Population gains, rent controls, strong job growth and red-tape around the construction of new units are among the other factors driving parabolic rent increases in Ontario’s capital, Myers suggests. “We’re essentially falling victim to our own success,” he explains.

“People want to come here, major corporations are expanding their offices and adding jobs downtown, and we’re just not offsetting that with enough supply.”

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Covid-19 altering Canadians’ housing needs: RBC

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Amid a pandemic-driven shift in demand as well as a surge in new listings, the Canadian housing market remained strong in August, RBC Economics reports.

Citing preliminary data from local real estate boards, RBC said that markets in many areas of the country remained “red hot” in August.

“But the bigger story might be that Covid-19 is now prompting more people to sell,” the report said, noting that new listings surged in urban centres such as Toronto, Ottawa and Vancouver.

“We think this in part reflects the pandemic altering the housing needs of many current owners — who are opting to move, something they might not have considered just a few months ago,” it said.

RBC noted that the Toronto market saw new listings jump 57% year over year in August, powering a 40% increase in home sales.

Sales were up more than 20% from July’s near-record levels, it said.

“Clearly, [that] market has fired on all cylinders this summer, making up for the major disruption caused by Covid-19 in the spring,” RBC said.

The primary drivers of sales activity and higher prices were low-rise homes, including single-detached homes, RBC reported.

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RBC’s customer base makes it a favourite of cyber attacks – security experts

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Royal Bank of Canada is among the most targeted institutions by cyber attacks due to its broad customer base, according to an analysis by Palo Alto Networks.

From December 2019 up to present, cybercriminals have been establishing malicious pages disguised as websites by major companies to conduct phishing attempts and other similarly invasive attacks.

RBC ranked third in the most spoofed domains list, more than streaming giant Netflix and professional networking portal LinkedIn. PayPal and Apple ranked first and second, respectively.

“When you look at the broad customer base that RBC has, it makes sense, especially when you compare it to some of the other big names,” said Jen Miller-Osborn, deputy director of threat research at Palo Alto Networks. “These attackers are going after [domains] where they can make the most money, so they’re focusing on these organizations that have really broad customer bases because that really ups the number of potential victims.”

In an interview with BNN Bloomberg, Miller-Osborn outlined what consumers should be looking out for to filter our fraudulent emails.

“Typically, the ones that are going to be scam-related are trying to invoke some sort of emotional response,” Miller-Osborn said. “So they might say something like ‘Someone tried to change your password, click here to say whether or not that was you,’ or ‘Click here to confirm this charge on your statement,’ or ‘We’ve locked your account for strange activity.’ Essentially, things that will make people anxious and will make them want to click first, and not take a step back and pause to think, ‘Is that really the kind of email that my bank would usually send?’”

Other red flags include misspellings and basic grammar errors in the message, especially the sender line.

“Attackers try to closely mimic domain names, so you might see the number zero substituted for ‘o’, or a one substituted for the letter ‘l’. Little thing like an extra ‘s’ or ‘c’ in the name. These things, people tend to glance over very quickly and not notice.”

Miller-Osborn said that these measures should be done in concert with the most effective step in deflecting a spoofing attempt: Calling the bank and asking them if the email that they supposedly sent was legitimate.

 

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Queen confirms new home at Windsor Castle with Buckingham Palace for ‘selected events’

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The Queen will be returning to Windsor Castle in a matter of weeks, with Buckingham Palace only used for ‘select events’.

Her Majesty and her husband Duke of Edinburgh will first spend time privately at Sandringham when they leave Balmoral next week, Buckingham Palace confirmed.

She had been spending summer at her retreat in Aberdeenshire amid speculation that she would not return to the capital amid the coronavirus pandemic.

A spokesperson said: “The Queen and The Duke of Edinburgh will depart Balmoral Castle during the week commencing September 14 to spend time privately on the Sandringham Estate.

“Subject to the finalisation of the autumn programme, Her Majesty’s intention is to return to Windsor Castle in October and to resume the use of Buckingham Palace for selected audiences and engagements.

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