Canadian job losses mount, boosting odds of Bank of Canada rate cut

Canada’s labour market took another hit in August, intensifying calls for the Bank of Canada to consider further interest rate cuts as the trade war continued to take its toll on the economy. 

Statistics Canada said on Friday that the economy shed 66,000 jobs last month, compounding a 41,000 decline in July, in a new sign that the economy and jobs outlook are weakening.

The trade war’s impact on manufacturing and other exposed sectors has been pronounced, and the latest employment report “fully reinforces any bias for the BoC to ease somewhat further here,” said Doug Porter, chief economist and managing director at CFA. Still, a September cut isn't a certainty, he cautioned."Inflation hasn’t quite given them the all-clear.”

Unemployment at decade high

The national unemployment rate climbed to 7.1% in August, its highest level outside the pandemic in nearly a decade. Most of the job losses were part-time, but the brunt was felt in core-age employment, with a 93,000 decline among those aged 25 to 54.

Regionally, Ontario (-26,000 jobs), B.C. (-16,000), and Alberta (-14,000) saw the largest drops, while Quebec remained stable.

“Southern Ontario cities continue to shoulder the nation’s highest unemployment rates, with Windsor (11.1%), Oshawa (9.0%), and Toronto (8.9%) bearing the brunt of trade war impact,” said Claire Fan, a senior economist at the Royal Bank of Canada.

Trade war and inflation loom large

The trade war’s toll is evident, with manufacturing losing 58,100 jobs over seven months and professional, scientific, and technical services shedding 26,000 positions in August alone.

Porter said the upcoming Consumer Price Index (CPI) release on September 16—just before the next BoC meeting—remained a key variable as the central bank weighs up a possible reduction. “Another softer inflation print could raise odds for additional easing relative to our current base case that assumes the BoC has already reached the end of the cycle,” Fan said.

Economic resilience

Despite the negative headlines, some underlying fundamentals remain resilient. “We don’t expect that will spread and cause a sharp, broad-based contraction,” Fan noted, pointing to Canada’s relatively low average tariff rate under CUSMA and healthy domestic consumer spending.

CMP

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market. 

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Home prices slide again in Toronto as condo slump continues

Prices across Toronto’s housing market were down again in August, led by another steep decline in condo prices throughout the city and its suburbs.

The average selling price of a home slipped by 5.2% compared with the same time last year, new data from the Toronto Regional Real Estate Board (TRREB) released on Thursday showed, with average condo prices across the wider 905 region slumping by 10.6%.

Condo sales also fell again, dropping by 3.4% in the city centre year over year and by 7.7% in the suburbs. Year to date, condo sales have plummeted by 16.6% overall compared with the same period in 2024, TRREB said.

The figures reflect an overall Toronto market that’s showing little sign of rebounding, with plenty of buyers continuing to wait on the sidelines in anticipation of possible further price drops – and lower interest rates – down the line.

Detached, semi-detached, and townhouse sales all increased in the city centre, sparked by generally lower prices (although townhouse prices inched upwards by 1% in the 416).

But a flood of new inventory is also entering the market, even with demand low by historical standards. There were 14,038 new listings entered into the MLS System in August, an increase of 9.4% over the same month in 2024.

TRREB’s chief information officer Jason Mercer suggested the price drops seen to date had not been enough to brighten the affordability picture for many buyers.

“A household earning the average income in the GTA is still finding it challenging to afford the monthly mortgage payment associated with the purchase of an average priced home,” he said in prepared remarks.

“This is even with lower borrowing costs and selling prices over the past year. Further relief in borrowing costs would see an increased number of buyers move off the sidelines to take advantage of today’s well-supplied market.”

A glut of new condo inventory is also expected to arrive in Toronto in the months ahead, potentially putting even further downward pressure on prices in that space and deepening a crisis that federal housing minister Gregor Robertson described this week as a market in “free fall.”

CMP

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market. 

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

How homeowners can avoid a 'huge' mortgage renewal shock

The Bank of Canada says about 60% of Canadian mortgage holders renewing this year and in 2026 will face payment increases, and a prominant Toronto-based mortgage broker and expert is urging homeowners not to wait until they receive a renewal letter before contemplating what their new payments might look like. 

Lea Zlatkin, licensed broker and LowestRates.ca expert, said advance planning is an essential part of navigating a renewal process that's become stressful for many owners. 

“Many Canadians wait until they receive their lender’s renewal letter to figure out what their new payments will look like,” she said in a new analysis. “By then, options are limited, and the payment increase can be a huge shock.”

Conversely, homeowners with variable-rate mortgages with variable payments could see their payments decrease by an average of 5% to 7%, as these payments have already peaked during the recent interest rate cycle.

Early planning essential

The Bank of Canada’s analysis, based on an enhanced dataset tracking outstanding mortgages, assumes interest rates will evolve according to financial market expectations and that borrowers will renew into similar mortgage products.

Zlatkin recommends homeowners begin planning four to six months before renewal. Key preparation steps include modelling worst-case scenarios, evaluating cash flow impacts, and gathering necessary documentation early.

“To prepare, calculate what your payments would look like if rates were higher by 15% to 20%, helping you understand the potential increase and how it will affect your budget,” Zlatkin advises.

Managing payment increases

The Bank of Canada's latest analysis on mortgage renewals found that borrowers facing increases will see their mortgage debt service ratio rise by a median of 2.7 percentage points, from 15.3% to 18.0%. However, several options exist to manage higher payments.

Approximately half of borrowers facing increases could eliminate them by extending their amortization by five years. Many homeowners have also built equity that could provide access to additional borrowing through home equity lines of credit.

The Bank of Canada notes that most borrowers should face interest rates below their original stress-test levels, which were set at least 200 basis points above their contract rate.

Income growth provides relief

Many mortgage holders will likely have seen income increases since origination or previous renewal, which should help manage higher payments. The analysis assumes stable labour markets and other economic conditions.

“Homeowners often make the mistake of assuming they’ll qualify for the same mortgage they had before, but that may not be the case when rates have changed,” Zlatkin warned. She emphasized the importance of consulting with mortgage professionals early in the process.

The Bank of Canada noted that while some borrowers will face challenges requiring spending adjustments, upcoming renewals are not expected to cause severe financial stress for most affected homeowners.

CMP

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market. 

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Immigration policy in the spotlight once again as housing markets ponder impact of cuts

Immigration policy has come to the fore once more this week with Conservative leader Pierre Poilievre’s push for the government to eliminate the temporary foreign worker program.

The measure, Poilievre charged, means the Canadian government is “shutting our own youth out of jobs” and causing the exploitation of poorly paid temporary immigrants.

He said the government has already handed out 105,000 permits this year, despite pledging to issue just 82,000.

In the housing and mortgage markets, immigration has been a hot-button issue in recent years. As rents and home prices swelled, then-prime minister Justin Trudeau announced a ban on foreign non-resident homebuyers purchasing property in Canada amid charges that that buyer cohort was creating excessive competition and driving up prices in the market.

Last year, Trudeau’s government also modified its immigration targets for the years ahead, announcing plans to welcome a lower number of new Canadians to the country than first envisaged amid a housing supply shortage.

Stabilizing the housing market was a key aim of that policy change, then-immigration minister Marc Miller said. The government said lower immigration numbers would “reduce the housing supply gap by approximately 670,000 units.”

That revised plan saw the government pledge to admit 395,000 new permanent residents, down 21% from the original target of 500,000, with further reductions expected through 2027.

The policy also introduced limits on temporary residents, including international students and foreign workers, reducing this group by nearly 450,000 by 2025.

It’s unclear whether scrapping the temporary foreign worker program would have a significant impact on Canada’s housing market, although major banks have already highlighted the effect lower immigration targets have had on home sales and prices.

That's good news for first-time buyers in many markets, but not so positive for landlords and investors – many of whom relied on new entrants to rent out their properties.

In Toronto, lower immigration this year is viewed as a key reason for cooling rents and plunging condo demand in the city. New immigrants have been a key renter cohort in years gone by, helping stoke investor interest in purchasing a secondary unit in the city and renting it out.

But that market is now nosediving, with federal minister of housing and infrastructure Gregor Robertson warning that Toronto’s condominium market “is now in free fall.”

“There’s far too much condo product in both Toronto and Vancouver,” Robertson said in an interview with the Toronto Star. “That type of housing was overbuilt in recent years, and it’s not selling in today’s market.”

Joel Fox, co-founder and chief operating officer at real estate closing platform Ownright, told Canadian Mortgage Professional that the market didn’t appear to be turning a corner, either.

“The hot question on everyone’s mind right now is ‘Why aren’t these selling when the prices drops are happening?’ But the price drops aren’t enough.”

The average asking rent for residential properties across Canada dropped to $2,088 in February, representing a 4.8% annual decline, according to the latest National Rent Report from Rentals.ca and Urbanation.

The report noted that this marks the largest yearly decrease since April 2021 and the fifth consecutive month of year-over-year rent declines.

CMP

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market. 

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Now is a good time to buy a home, say majority of Canadians

Canadian homebuyers are expressing renewed confidence in the housing market this fall, with 54% of Canadians believing now is “a good time to strike a deal” on a home, according to RE/MAX Canada’s 2025 Fall Housing Market Update released Wednesday.

The report, based on data from January 1 to July 31, 2025, reveals a national picture marked by regional variations and shifting dynamics following a period of consumer uncertainty in the first quarter.

Atlantic Canada and the Prairies recorded consistent year-over-year price gains across all surveyed markets, while Ontario and British Columbia saw declines in two-thirds of theirs. Home sales fell year-over-year in 62% of markets, with 64.8% of housing markets showing decreased activity.

“Canada’s real estate landscape paints a complex picture of resilience and caution, influenced by regional nuances and continued economic uncertainty,” said Don Kottick, president of RE/MAX Canada.

Western Canada reported mixed results, with Vancouver prices down 6.3% and Fraser Valley dropping 5.5%. In contrast, Prairie cities showed resilience, with Winnipeg rising 7.7%, Edmonton up 7.3%, and both Regina and Saskatoon increasing 7%.

 

First-time buyers take back seat

Buyer demographics have shifted. While first-time buyers led the market in 2024, they have pulled back in 2025, with families, newcomers to Canada, and retirees driving more activity.

First-time buyers are also trending older, typically entering in their late 20s to 40s, underscoring affordability challenges as well as the increasing complexity of entering the market, the report noted. Among those planning to buy within 12 months, 28% have saved at least 20% for a down payment, while 33% have set aside 15% or more.

The Leger survey found that 68% of prospective buyers said a 5% to 10% price drop would significantly affect their ability to purchase, while 64% would feel ready if interest rates fell by 0.5% to 1%.

Economic sentiment improves

Consumer sentiment is stabilizing, with 46% of survey respondents expecting economic stability in the next six months and 38% viewing the current economy as strong. Notably, 92% of homeowners continue to see their properties as solid long-term investments.

Looking ahead, 46% of Canadians express optimism that government commitments to expand housing supply will improve affordability within three to five years, signalling renewed hope for recovery.

Market outlook and seller confidence

RE/MAX Canada projects average national home prices will decrease 6.5% this fall, with sales expected to decline 5% for the rest of 2025. Despite this, seller confidence remains high, with 63% believing they can secure their asking price.

The report highlights a 25% surge in conditional sales across 33 of 37 surveyed regions, suggesting buyer confidence is being lifted by affordability improvements.

CMP

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market. 

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!