John Vassos

The number of home sales recorded over Canadian MLS Systems edged up 1.1% on a month-over-month basis in August 2025. It was the best month of August for sales since 2021, and the fifth straight monthly increase in activity, making for a cumulative 12.5% since March. Unlike in recent months, when gains were led overwhelmingly by the Greater Toronto Area (GTA), sales in the GTA were down slightly in August, but this was more than offset by higher sales in Montreal, Greater Vancouver and Ottawa. Activity has continued to gradually pick up steam over the last five months, but the experience from a year ago suggests that trend could accelerate this fall, said Shaun Cathcart, CREAs Senior Economist. Part of what drives sales at different points in the year is the availability of a lot of fresh property listings for buyers to buy. For the fall market, that always happens right at the beginning of September, and this year was no exception. If last year is any kind of guide, then there is the potential that sales could really pick up in the next month or so depending on how many buyers are drawn off the sidelines, particularly if we see a September rate cut by the Bank of Canada. August Highlights: National home sales were up 1.1% month-over-month. Actual (not seasonally adjusted) monthly activity came in 1.9% above August 2024. The number of newly listed properties climbed 2.6% on a month-over-month basis. The MLS Home Price Index (HPI) was little changed (-0.1%) month-over-month and was down 3.4% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price rose 1.8% on a year-over-year basis. https://stats.crea.ca/en-CA/

The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2.45%. After remaining resilient to sharply higher US tariffs and ongoing uncertainty, global economic growth is showing signs of slowing. In the United States, business investment has been strong but consumers are cautious and employment gains have slowed. US inflation has picked up in recent months as businesses appear to be passing on some tariff costs to consumer prices. Growth in the euro area has moderated as US tariffs affect trade. Chinas economy held up in the first half of the year but growth appears to be softening as investment weakens. Global oil prices are close to their levels assumed in the July Monetary Policy Report (MPR). Financial conditions have eased further, with higher equity prices and lower bond yields. Canadas exchange rate has been stable relative to the US dollar. Canadas GDP declined by about 1% in the second quarter, as expected, with tariffs and trade uncertainty weighing heavily on economic activity. Exports fell by 27% in the second quarter, a sharp reversal from first-quarter gains when companies were rushing orders to get ahead of tariffs. Business investment also declined in the second quarter. Consumption and housing activity both grew at a healthy pace. In the months ahead, slow population growth and the weakness in the labour market will likely weigh on household spending. Employment has declined in the past two months since the Banks July MPR was published. Job losses have largely been concentrated in trade-sensitive sectors, while employment growth in the rest of the economy has slowed, reflecting weak hiring intentions. The unemployment rate has moved up since March, hitting 7.1% in August, and wage growth has continued to ease. CPI inflation was 1.9% in August, the same as at the time of the July MPR. Excluding taxes, inflation was 2.4%. Preferred measures of core inflation have been around 3% in recent months, but on a monthly basis the upward momentum seen earlier this year has dissipated. A broader range of indicators, including alternative measures of core inflation and the distribution of price changes across CPI components, continue to suggest underlying inflation is running around 2%. The federal governments recent decision to remove most retaliatory tariffs on imported goods from the US will mean less upward pressure on the prices of these goods going forward. https://www.bankofcanada.ca/2025/09/fad-press-release-2025-09-17/

Highlights Combined housing starts across Canadas 7 key census metropolitan areas (CMAs) in the first half of 2025 were just a few units below 2024 levels and near all-time highs. However, this overall stability masked sharp regional differences. Gains in Calgary, Edmonton, Montral and Ottawa were offset by declines in Toronto, Vancouver and Halifax. Ground-oriented construction including single-detached, semi-detached and row homes saw a modest growth, driven by lower mortgage rates unlocking demand in more affordable markets. In higher-cost centres, like Toronto and Vancouver, affordability remained strained and homebuyers cautious amid economic uncertainty. Condominium apartment starts declined in most key markets as slower presales led to project delays and cancellations. Meanwhile, purpose-built rental starts surged, bolstered by government support and a shift among developers toward the rental market. Active and new listings, which represent the other key component of housing supply, were either stable (Edmonton and Montral) or rising (Vancouver, Toronto, Calgary, Ottawa and Halifax). Combined with strong housing completions, they have contributed to an increase in the overall supply in Canadas key markets. Ongoing construction slowdowns in select CMAs pose risks to future housing supply, workforce retention and affordability. In the context of trade tensions, economic uncertainty and slower population growth, we expect combined starts across the 7 major CMAs to recover only gradually, with modest improvement by 2027. CMHC

A new TD survey reveals how todays increasingly complex market is shaping the way Canadians approach one of lifes biggest financial decisions: their mortgage. While the majority of Canadians feel informed about the mortgage process, the survey shows that economic volatility, rate unpredictability, and tariff pressures are prompting many to rethink their strategies, highlighting that expert guidance is a vital tool to navigate the challenges of todays environment. Canadians are navigating interest rate uncertainty While the Bank of Canada has held rates steady in recent months, Canadians remain divided on where rates could head next. The survey found that 32 per cent expect rates to rise, 27 per cent anticipate a decrease, and 29 per cent believe theyll remain unchanged. This lack of consensus reflects the challenges Canadians face when making long-term financial decisions in a rapidly shifting landscape. With so much uncertainty around what comes next, Canadians are thinking carefully about how best to approach their mortgage, says Patrick Smith, VP, Product Management, Real Estate Secured Lending at TD. Expert advice can help bring clarity to that complexity, so Canadians can make confident, informed choices aligned with their needs and long-term goals. Economic pressures add even more complexity Beyond rate expectations, Canadians are increasingly aware of how broad economic shifts may influence their homeownership goals. Tariffs, in particular, are playing a key role in how Canadians make decisions about their mortgage. According to the survey, nearly a third (29 per cent) of Canadians say that tariffs have caused them to reassess their mortgage strategy. The survey also found: 31 per cent say that tariffs have impacted their borrowing capacity; 28 per cent agree that tariffs have caused them to reconsider taking out a mortgage; 28 per cent agree that tariffs have impacted which mortgage lender they are choosing or plan to choose. https://stories.td.com/ca/en/news/2025-08-20-market-uncertainty-leaves-canadians-divided-2c-expert-advice-b

Top factors influencing decisions on whether to have children include financial stability and finding the right partner. Nearly nine-in-ten find balancing the emotional and financial demands of parenthood challenging. The latest BMO Real Financial Progress Index reveals seven-in-ten Gen Z (70%) and Millennials (69%) want to have children but worry doing so would negatively affect their financial security. While 81% of Canadians say being a parent brings joy and fulfillment to their lives, over half (53%) of parents admit having children compromised their financial security. The BMO survey examines how the financial and emotional challenges related to raising children in the current economic environment are shaping parenting decisions and found: Family Defining Decisions: Financial stability (44%) is the top consideration influencing Canadians decision on whether to have children, followed by finding the right partner (34%), the ability to be fully present for their child(ren) (27%), mental and physical health (24%) and career goals and/or prospects (17%). Over a third (35%) would reconsider their decision not to have children if there was less of a negative effect on their finances. Family Size Aspirations: On average, aspiring parents want two children, but that number rises to three if financial constraints are removed. Emotional Toll of Parenthood: 89% say balancing the emotional and financial demands of parenthood is challenging and over half (55%) regularly feel overwhelmed by their familys financial responsibilities a sentiment felt most profoundly among Gen Z (72%) and Millennials (72%). Keeping Up with the Jones: Over three quarters (76%) admit there is pressure for parents to keep up with other families by spending more than they should. Long-Term Implications: 86% report that everyday childcare costs including daycare, after-school programs, and school supplies, negatively affect their ability to save for long-term goals such as higher education or homeownership. https://newsroom.bmo.com/2025-08-13-BMO-Survey-Gen-Z-and-Millennials-Face-Challenges-Raising-a-Family-Amid-Rising-Financial-Pressures

Home sales increased by 3.8% from June to July at the national level, the fourth consecutive advance following four monthly contractions. On the supply side, new listings remained roughly stable (+0.1%) from June to July. Active listings decreased by 0.7%, the second monthly decline in a row as cancelled listings continued to be elevated. Overall, the number of months of inventory (active listings-to-sales) edged down for the third month in a row from 4.6 in June to 4.4 in July. Market conditions tightened during the month but remained balanced compared to the historical average. The balanced market conditions at the national level largely reflect soft conditions in Ontario and B.C., while markets in all other provinces continue to favour sellers. Housing starts increased by 10.6K from 283.5K in June to 294.1K in July (seasonally adjusted and annualized) after being roughly stable over the past two months. Starts were well above the consensus expectation of 265.0K. Starts increased in urban areas (+12.4K to 273.6K), while they declined in rural areas (-1.9K to 20.5K). In urban centres, starts in the multi-unit segment increased (+12.4K to 231.1K) while they remained roughly stable in the single-detached segment (+0.2K to 42.5K). The TeranetNational Bank Composite National House Price Index decreased by 0.8% from June to July, after adjusting for seasonal effects. Seven of the 11 CMAs included in the index experienced decreases: Hamilton (-2.5%), Winnipeg (-1.2%), Toronto (-1.1%), Vancouver (-0.7%), Calgary (-0.5%), Montreal (-0.5%) and Edmonton (-0.1%). Conversely, prices rose in Quebec City (+1.3%), Ottawa-Gatineau (+0.3%) and Victoria (+0.1%), while they remained stable in Halifax. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-market.pdf

The number of home sales recorded over Canadian MLS Systems climbed 3.8% on a month-over-month basis in July 2025. Building on gains recorded over the previous three months, transactions are now up a cumulative 11.2% since March. The July increase in home sales was again led overwhelmingly by the Greater Toronto Area (GTA), where transactions, while still historically low, have now rebounded a cumulative 35.5% since March. With sales posting a fourth consecutive increase in July, and almost 4% at that, the long-anticipated post-inflation crisis pickup in housing seems to have finally arrived, said Shaun Cathcart, CREAs Senior Economist. Looking ahead a little bit, it will be interesting to see how buyers react to the burst of new supply that typically shows up in the first half of September. July Highlights: National home sales were up 3.8% month-over-month. Actual (not seasonally adjusted) monthly activity came in 6.6% above July 2024. The number of newly listed properties was unchanged (+0.1%) on a month-over-month basis. The MLS Home Price Index (HPI) was unchanged month-over-month and was down 3.4% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price edged up 0.6% on a year-over-year basis. https://stats.crea.ca/en-CA/

From CMHC Getting more rental housing built requires a balance between increasing returns to investors and protecting tenants. But tighter rent control is often not the solution. Addressing housing affordability is critical for Canada. Owning a home has become so expensive in some cities that renting has become the only viable option for many. Over recent years weve had low vacancy rates, and tenants moving to new units see sharp rent increases. We need a substantial and sustained increase in the supply of rental units over the long term. Many, however, express misgivings about private-sector involvement. They are concerned that private landlords may charge higher rents or take advantage of their tenants. Government-supplied rental units or rent control are seen as solutions. Are these concerns valid and are solutions appropriate? What can be learned from research on increasing private-sector rental supply while protecting tenants? Our research found no firm evidence that private-sector ownership led to undue increases in rents. In addition, the international literature suggests that rent control risks lowering housing supply in the long term. Based on recent surveys, the annual eviction rate for renters in Canada is estimated at between 1% and 3%. Having effective tenant protection is important, balanced with harnessing private-sector investment in the rental sector. https://www.cmhc-schl.gc.ca/observer/2025/accelerating-rental-supply-incentivizing-development-safeguarding-tenants

Statistics Canadas Distributions of Household Economic Accounts (DHEA) contains a treasure chest of interesting facts and figures on the financial position of households. One trend that stood out for several quarters now is the steady decline in average mortgage balances of young families, even as mortgage debt has continued to rise for all other age groups. Since the peak in Q3 2022, average mortgage balances among households where the primary earner is under 35 years of age have fallen by $15.5k. Compared to Q1 2023, the reduction stands at $11k. Over the same period, mortgage balances increased by $18k for households aged 55-64 and by $4k for those aged 65 and older. The drop among younger borrowers appears to be at least partly explained by a decline in young people entering the housing market or opting for less expensive homes due to affordability challenges. Household formation in this age group has surged, growing at 2.5 times faster than other age groups in the last two years yet many of these new households remain renters. According to Statistics Canada 2024 Canadian Social Survey more than half of young people reporting being very concerned about their ability to afford housing. Home ownership remains elusive for younger generations with 35% of young adults renting, compared to 23% of older aged group. https://economics.td.com/ca-young-families-shrinking-mortgage

Canadas housing market will continue to cool in 2025 due to trade tensions, economic uncertainty, slower population growth and increasing unemployment. Home prices are expected to fall around 2%, with larger drops in Ontario and British Columbia as buyers and developers take a wait-and-see approach. Affordability remains a major issue and new construction is slowing. Rental markets are easing slightly as more supply comes online and demand softens. A gradual recovery is expected in 2026 as trade tensions ease and economic conditions improve. Highlights Trade tensions and slower population growth are contributing to a likely modest recession in 2025, dampening business and consumer confidence and slowing housing activity. Home prices are expected to fall 2% in 2025 with larger drops in Ontario and British Columbia. Developers are delaying projects due to high costs, weak demand, and uncertainty. A gradual recovery in the housing market is expected in 2026 as trade frictions ease, economic confidence improves and economic growth resumes. https://www.cmhc-schl.gc.ca/observer/2025/summer-update-2025-housing-market-outlook

By TD Economics An average mortgage holder who has recently renewed, or is about to, is likely absorbing an increase in monthly payments. Media headlines are raising alarm bells that the ongoing wave of mortgage renewals is a looming shock. So, it may come as a surprise to learn that aggregate mortgage payments in Canada are actually declining. Lets unpack how both dynamics can be true at the same time. First, the part thats well understood: many households are facing higher payments. The most popular mortgage term is five years. So as an example, a borrower with a $500,000 mortgage who locked in a 2.5% mortgage rate in June 2020 would now be renewing at a rate closer to 4.0%, with monthly payments rising by about $320. According to a Bank of Canada report published earlier this year, about 60% of outstanding mortgages will renew by the end of 2026, and 40% are expected to renew at higher rates. This is the looming mortgage shock the media is warning about. Yet nationally as odd as it may sound aggregate mortgage payments are on the decline, driven by lower mortgage rates. We forecasted this in our November 2024 report, and the data has since confirmed the outcome. In the final two quarter of last year, mortgage interest payments declined by an average of 1.7%, providing enough relief to push total mortgage payments into contraction. How can this contradiction seemingly exist? The answer lies in the composition. https://economics.td.com/ca-mortgage-renewals

The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%. While some elements of US trade policy have started to become more concrete in recent weeks, trade negotiations are fluid, threats of new sectoral tariffs continue, and US trade actions remain unpredictable. Against this backdrop, the July Monetary Policy Report (MPR) does not present conventional base case projections for GDP growth and inflation in Canada and globally. Instead, it presents a current tariff scenario based on tariffs in place or agreed as of July 27, and two alternative scenariosone with an escalation and another with a de-escalation of tariffs. While US tariffs have created volatility in global trade, the global economy has been reasonably resilient. In the United States, the pace of growth moderated in the first half of 2025, but the labour market has remained solid. US CPI inflation ticked up in June with some evidence that tariffs are starting to be passed on to consumer prices. The euro area economy grew modestly in the first half of the year. In China, the decline in exports to the United States has been largely offset by an increase in exports to the rest of the world. Global oil prices are close to their levels in April despite some volatility. Global equity markets have risen, and corporate credit spreads have narrowed. Longer-term government bond yields have moved up. Canadas exchange rate has appreciated against a broadly weaker US dollar. The current tariff scenario has global growth slowing modestly to around 2% by the end of 2025 before returning to around 3% over 2026 and 2027. In Canada, US tariffs are disrupting trade but overall, the economy is showing some resilience so far. After robust growth in the first quarter of 2025 due to a pull-forward in exports to get ahead of tariffs, GDP likely declined by about 1.5% in the second quarter. This contraction is mostly due to a sharp reversal in exports following the pull-forward, as well as lower US demand for Canadian goods due to tariffs. Growth in business and household spending is being restrained by uncertainty. Labour market conditions have weakened in sectors affected by trade, but employment has held up in other parts of the economy. The unemployment rate has moved up gradually since the beginning of the year to 6.9% in June and wage growth has continued to ease. A number of economic indicators suggest excess supply in the economy has increased since January. https://www.bankofcanada.ca/2025/07/fad-press-release-2025-07-30/

A special report from the BMO Real Financial Progress Index reveals concerns about the cost of living and economic uncertainty have not cooled Canadians summer travel plans, with 62% planning on spending the same amount or more on vacations and travel this summer compared to 2024. Nearly four in five Canadians (77%) plan on travelling this summer, with an average budget of $3,825, which includes the cost of flights, hotels and accommodations, rentals, gas and food. The survey examined how Canadians are preparing for their summer vacation plans and found: 59% are opting to travel within Canada to save money. More than half (55%) have altered their vacation plans due to rising costs and inflation. 46% have reduced their spending throughout the year to afford their summer vacation plans. Nearly a third (32%) admit to compromising their long-term savings to afford travel plans. The BMO Real Financial Progress Index also explores Canadians summer spending plans and forecasts: Warming up for wedding season: 34% plan on spending the same amount or more on weddings for family and friends this summer compared to last year. Over half (54%) do not plan on spending on weddings for family and friends this summer. Storm of celebrations and steady spending: Two in five (39%) plan on spending the same amount or more on special events, including graduations and showers this summer than they did in 2024. Less than half (48%) do not have plans to spend on special events this summer. Family activity budgets feel the heat: 29% will spend the same amount or more on summer camps and childcare compared to 2024. 61% have no plans to spend on summer camps and childcare this year. Sawdust and sunshine: 42% will spend the same amount or more on home renovations. 44% do not have home renovation plans during the summer. Sunny with a chance of splurging: Nearly a third (30%) plan on spending the same amount or more for a large purchase including a home, a car, a boat, etc. 57% do not plan on making a large purchase this summer. https://about.bmo.com/bmo-survey-summer-travel-spending-heats-up-despite-economic-concerns/

Summary Home sales increased by 2.8% from May to June at the national level, a third advance following four monthly contractions. On the supply side, new listings decreased by 2.9% from May to June. Active listings remained on their upward trend for a sixth month in a row, increasing by 0.6% in June despite still elevated cancelled listings. Overall, the number of months of inventory (active listings-to-sales) edged down for the second month in a row from 4.8 in May to 4.7 in June. Market conditions tightened marginally during the month but remained balanced compared to the historical average. The balanced market conditions at the national level largely reflect particularly soft conditions in Ontario and B.C., while markets in all other provinces continue to favour sellers. Housing starts remained roughly stable for a second month in a row (+1.0K) in June at 283.7K (seasonally adjusted and annualized), a print well above the median economist forecast calling for 262.5K units. Starts in both urban (+0.8K to 261.7K) and rural (+0.3K to 22.0K) areas were roughly flat during the month. In urban centres, both starts in the multi-unit (+0.4K to 219.0K) and single-detached segments (+0.3K to 42.7K) were flat as well. The TeranetNational Bank Composite National House Price Index declined by 0.5% from May to June after seasonal adjustment. Six of the 11 CMAs included in the index saw declines: Ottawa-Gatineau (-1.2%), Calgary (-1.0%), Hamilton (-0.9%), Toronto (-0.8%), Vancouver (-0.8%), and Victoria (-0.5%). In contrast, prices rose in Halifax (+2.0%), Winnipeg (+1.6%), Edmonton (+1.6%), Quebec City (+0.5%), and Montreal (+0.3%). https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-market.pdf

The number of home sales recorded over Canadian MLS Systems rose 2.8% on a month-over-month basis in June 2025, building on the 3.5% gain recorded in May. Over the past two months, the recovery in sales activity was led overwhelmingly by the Greater Toronto Area (GTA), where transactions, while remaining historically low, have rebounded a cumulative 17.3% since April. At the national level, June was pretty close to a carbon copy of May, with sales up about 3% on a month-over-month basis and prices once again holding steady, said Shaun Cathcart, CREAs Senior Economist. Its another month of data suggesting the anticipated rebound in Canadian housing markets may have only been delayed by a few months, following a chaotic start to the year; although with the latest 35% tariff threat, were not out of the woods yet. June Highlights: National home sales were up 2.8% month-over-month. Actual (not seasonally adjusted) monthly activity came in 3.5% above June 2024. The number of newly listed properties fell 2.9% on a month-over-month basis. The MLS Home Price Index (HPI) was almost unchanged (-0.2%) month-over-month and was down 3.7% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price was down 1.3% on a year-over-year basis. https://www.crea.ca/media-hub/news/canadian-home-sales-up-again-in-june-national-prices-holding-steady/

This Rental Market Update report provides an update on rental market conditions across Canada building on insights from our 2024 Rental Market Report, using alternative data sources. It also includes insights obtained through market intelligence from industry experts. Highlights Since October 2024, advertised rents are declining due to increased supply, while rents for occupied dwellings continue to rise at a slower pace than a year ago. Sluggish job markets and decelerating migration are creating challenging environments for landlords and property managers. Purpose-built rental supply is growing. CMHC construction financing programs and products supported an estimated 88% of Canadas new purpose-built rental apartment starts in 2024. Vacancy rates are expected to rise in most major markets this year. Despite easing rent growth and increasing supply, rental affordability isnt improving especially in Vancouver and Toronto as turnover rents are driving increases. Calgary, however, has shown a slight improvement. https://www.cmhc-schl.gc.ca/observer/2025/2025-mid-year-rental-market-update

From Scotiabank HIGHLIGHTS Nearly all Canadian provinces are poised for slowdowns in 2025. While the Canadian economy started the year with solid momentum, growth is expected to decelerate over the course of the year in the wake of the U.S. trade war and changes to Canadian immigration policy. Rising unemployment and lower population growth will weigh on consumption growth, and housing market activity has slowed as households delay major purchases. Exports are likely to decline due to the tariffs and spillovers from slower U.S. growth. We expect growth in central Canada to underperform the national average, given these provinces higher exposure to trade risks. While we continue to think a recession will be avoided, there is a high degree of uncertainty as to how the tariffs will ultimately impact the economyin addition to the possibility of new tariffs. Policy measures from the federal and provincial governments could provide a boost to economic activity, especially over the medium-term. That said, the tariffs and impact of elevated uncertainty are likely to weigh on growth in all regions of the country in the near-term, and compound the effects of sharply reduced population growth. Household spending growth is likely to slow. Household consumption started the year with strong momentum, aided by 225 basis points of interest rate cuts by the Bank of Canada between June 2024 and March 2025. Despite the tariffs and uncertainty that emerged early this year, retail sales in Q1 were solid again in aggregate, though this was to some extent driven by vehicle sales being pulled forward to March to avoid tariffs coming into effect in April, and indicated weakness in the most tariff-exposed economies of Ontario and Quebec. April and May data indicate that vehicle sales are slowing in Q2 and we expect this to continue throughout the year. In addition, drag from mortgage resets at higher interest rates is likely to continue, as we expect the Bank of Canada to hold off on further rate cuts until next year. The housing market has softened. Sales of existing homes slowed after the onset of the trade war in some provincesespecially the most expensive markets of B.C. and Ontario. However, housing market activity in the provinces east of Ontario has been remarkably resilient. New housing starts in B.C. and Ontario continue to trend lower, but residential construction contributed positively to growth in Q1 in most provinces, especially Saskatchewan. Abating economic uncertainty would release pent-up demand, especially in Ontario and B.C., where current sales rates remain below fundamental levels and new housing starts have been trending lower for some time. Falling interest rates would provide a further tailwind to residential activity, as will new government initiatives to support housing construction. That said, lower immigration will reduce some demand for housing, especially in the largest cities, which have long seen more than their fair share of newcomers to Canada. Additionally, the federal government has removed the GST first-time home buyers of new homes valued up to $1 mn, and reduced the GST on new homes between $11.5 mn for first-time home buyers. This policy will add to housing demand, however other factors such as tariff uncertainty and softer labour markets are likely to dominate in the near-term. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.the-provinces.scotiabank-s-provincial-outlook--june-27--2025-.html

From CMHC Canada faces a housing affordability challenge. For many years, housing prices and rents in Vancouver and Toronto attracted attention from all over the world. Over time, these increases came to burden many Canadians and their children. Low-income and some middle-class households struggle to even find a place to live, let alone at a price they can afford. On a wider scale, the productivity of the Canadian economy suffers from unaffordable housing as the capacity to attract skilled workers is diminished and the young are deterred from staying in our largest cities partly because of the lack of attainable housing. And Canadas enormous level of household debt creates a vulnerability in the event of a global economic crisis. Preview of results We find that housing starts need to double over the next decade. Compared to a projected rate of about 250,000 new housing units annually until 2035, Canada needs to increase housing starts to around 430,000 to 480,000 units per year to restore affordability (depending on parameters). This can only be possible with: a significantly greater workforce more private-sector investment changes in technology and productivity such as more automation and modular construction The need to increase housing supply remains critical. https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/research-reports/accelerate-supply/canadas-housing-supply-shortages-a-new-framework

In the first quarter of 2025, Vancouver was the census metropolitan area (CMA) with the highest average asking rent for a two-bedroom apartment, at $3,170, followed by Toronto ($2,690), Victoria ($2,680) and Ottawa ($2,490). By comparison, Montral ranked 17th, with an average asking rent of $1,930. Smaller CMAs in Quebec recorded the lowest average asking rents, including Drummondville ($1,200) and Sherbrooke ($1,250). Because prospective renters typically face higher rents compared with long-term tenantswhose rents reflect past leases and can also be subject to rent control regulationsasking rents offer a picture of current market trends. Asking rents in Montral increased nearly 71% from 2019 to the first quarter of 2025 The CMAs of Drummondville and Sherbrooke, which had the lowest average asking rents in the first quarter of 2025 were those that saw the largest increase in average asking rents for two-bedroom apartments from the first quarter of 2019 to the first quarter of 2025. During this period, the average asking rent increased from $600 to $1,200 in Drummondville and from $660 to $1,250 in Sherbrooke. Montral also experienced a marked increase in average asking rent from 2019 to the first quarter of 2025. Starting at $1,130 in 2019, asking rent in this CMA grew by 70.8% to reach $1,930 in the first quarter of 2025. By contrast, the CMAs with the highest average asking rents experienced slower relative growth from 2019 to the first quarter of 2025. The Toronto CMA saw overall 5.1% growth in the asking rent of two-bedroom units, increasing from $2,560 in the first quarter of 2019 to $2,690 in the first quarter of 2025. Average asking rents in Toronto declined during the first year of the COVID-19 pandemic, followed by an increase to reach a peak of $2,920 in the second half of 2023. In the first quarter of 2025, average asking rents subsequently decreased by 5.6% year over year in Toronto. Vancouver followed a similar pattern as Toronto, although it experienced comparatively stronger growth. Average asking rent for two-bedroom apartments increased by 27.3% from the first quarter of 2019 to the first quarter of 2025 (from $2,490 to $3,170). In this CMA, average asking rents started increasing in early 2021 to reach a peak of $3,580 in the third quarter of 2023, then decreased by 7.8% from the first quarter of 2024 to the first quarter of 2025. https://www150.statcan.gc.ca/n1/daily-quotidien/250625/dq250625b-eng.htm

By TD Economics Highlights Weve modestly upgraded our home sales growth forecasts for the second half of the year across Canada. This represents the assumption that pent-up demand that was sidelined in a weaker-than-expected first half returns to the market. The data is cooperating with this narrative, with Canadian home sales up 4% m/m in May after inching higher in April. However, uncertainty remains elevated, and job markets are deteriorating. As such, even if sales levels improve, they are likely to remain subdued, particularly in B.C. and Ontario. Weve nudged up our average home price growth forecasts in markets outside of B.C. and Ontario for the back half of the year, as sales gains interact with supply/demand balances that favour sellers in these regions. Were retaining our view that quarterly price growth will be the firmest in the Prairies in the second half of 2025. In contrast, 2025H2 home price growth is seen as declining, on average, in B.C. and Ontario. Supply/demand balance indicators suggest that there is too little demand chasing too much supply in these markets, leaving buyers with some power in negotiations. We could see a compositional boost to prices (i.e. sturdier sales gains for more expensive properties that upwardly pressure average prices), particularly in Ontario, however. This reflects the assumption of some underperformance in the less-expensive GTA condo market due to weak investor demand. Were expecting stronger growth in Canadian home sales and average home prices in 2026, backed by an improving economy, reduced uncertainty, and a modest downdraft in yields from their current levels. However, the scale of bounce-back in Canadian average home prices will likely be restrained by poor affordability in key markets like B.C. and Ontario. Whats more, population growth should remain weak next year, restraining rent gains and preventing any notable recovery in investor demand. We expect the federal governments housing plan to boost supply. However, given that the federal budget will only land this fall, along with lags inherent in the homebuilding process, we wouldnt expect a material boost to housing completions until perhaps late next year (at the earliest). Absent a steep recession, any significant improvement in housing affordability would take time and require a sustained ramp up housing construction. https://economics.td.com/ca-provincial-housing-outlook

Highlights Mortgage lenders entered 2025 in a healthy position, but economic uncertainty is increasing risk to the residential mortgage market. At the household level, unemployment is the most common cause of late mortgage payments. Variable rate mortgages became the most popular mortgage type in early 2025, reaching 42% of new mortgages in February, as the premium for variable-rate mortgages largely disappeared. Terms between 3 and less than 5 years were also still popular with new borrowers (32%). This speeds up the impact of future interest rate changes on borrower payments. New borrowers have taken advantage of lower interest rates to reduce their monthly payments. They havent shortened their amortization periods to the levels prior to the increase in interest rates. Mortgage lending by the largest alternative lenders outpaced the growth of national mortgage credit in 2024. These lenders risk profile has increased moderately due to higher delinquency rates, leading them to increase their loan loss allowance. https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-research/research-reports/housing-finance/residential-mortgage-industry-report

CANADA HOUSING MARKET: HOUSING RESALE ACTIVITY PICKED UP IN MAY 2025ARE WE WITNESSING EASING EFFECTS FROM TRADE-RELATED UNCERTAINTY ON HOUSING DEMAND? SUMMARY National housing resale activity increased from April to May with both sales and new listings rising, leaving market conditions relatively unchanged over this period. Sales increased 3.6% (sa figures) nationally from April to May, following a 0.8% increase from March to April (revised from an initially published -0.1% decline). Despite monthly increases in the last 2 months, national sales were -4.3% (nsa) weaker in May 2025 than in May 2024. In May 2025, national sales were about 35% lower than their February 2022 level, the month just before the Bank of Canada started its tightening cycle for its policy rate. National new listings rose 3.1% (m/m sa) in May and were 8% higher (nsa) than their level in the same month of 2024. In May, new listings continued their upward trend since their recent trough in March 2023. From this period to May 2025, national new listings increased by more than 40% (from sa figures). With the modestly stronger increase in national sales than for new listings, the national sales-to-new listings ratio tightened negligibly, rising from 46.8% to 47.0% from April to May, suggesting resale conditions stayed essentially unchanged over this period and are still within the estimated balanced conditions range, but very close to the buyers favouring conditions zone. Indeed, observed (sa) levels for this indicator in the last 3 months were the lowest since February 2009. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-news-flash.june-16--2025.html

By TD Economics Amid a downgraded national growth profile for 2025, were retaining our view that the Atlantic and Prairie Regions outperform this year. B.C.s economy is also expected to display resilience. In contrast, Ontario and Quebec are poised for much softer growth performances given their relatively high orientation towards manufacturing. Provincial economies across the country benefitted from a sharp rise in exports in Q1 due to tariff-front running, but the near-term trade picture is indeed rocky. Ontario and Quebec will see disproportionate impacts from U.S. tariffs on the steel, aluminum, and automotive sectors. Were also expecting that additional U.S. levies on copper, pharmaceuticals, semiconductors and lumber will be applied. Our assumption of a gradual easing in U.S. tariff rates by year end means that the stage is set for a modest recovery in Canadas industrial heartland in 2026. Commodity based economies are holding up better this year, but growth has still been downgraded relative to March. Expedited OPEC+ output plans and weak global demand have led us to mark down our oil price forecast, accentuated by an unexpectedly strong Canadian dollar. The recent escalation in Middle East tensions pose an upside risk to prices in H2-2025. Canadas labour market continues to cool. Ontario, Quebec, B.C., and Manitoba have been absorbing most of the shock so far this year, as unemployment rates have risen faster than in other regions. Unemployment rates in the Atlantic provinces have broadly stabilized as employment growth and labour force growth have weakened in tandem. Saskatchewans labour market is the clear provincial standout due to its relative strength. With this years provincial budget season wrapping, a few themes have emerged. Provincial revenues and overall fiscal balances are expected to take a hit this year, reflecting U.S. trade tensions, and provinces have introduced measures to buffer their respective economies in the short run. Ramped up capital spending plans also featured heavily. This could lift economic growth, but is also expected to boost already-elevated debt burdens. With some signals that pent-up demand may be returning, were expecting positive growth in home sales in the back half of next year across Canada. Still, a weak economy and uncertainty should keep sales levels subdued. Near-term national home price growth will be restrained by loose supply/demand balances in B.C. and Ontario, although firmer price gains are expected elsewhere, where conditions are considerably tighter. https://economics.td.com/provincial-economic-forecast

The number of home sales recorded over Canadian MLS Systems climbed 3.6% between April and May 2025, marking the first gain in activity since last November. The monthly increase was led by the Greater Toronto Area (GTA), Calgary, and Ottawa. May 2025 not only saw home sales move higher at the national level for the first time in more than six months, but prices at the national level also stopped falling, said Shaun Cathcart, CREAs Senior Economist. Its only one month of data, and one car doesnt make a parade, but there is a sense that maybe the expected turnaround in housing activity this year was just delayed for a few months by the initial tariff chaos and uncertainty. May Highlights: National home sales were up 3.6% month-over-month. Actual (not seasonally adjusted) monthly activity came in 4.3% below May 2024. The number of newly listed properties rose 3.1% on a month-over-month basis. The MLS Home Price Index (HPI) was almost unchanged (-0.2%) month-over-month and was down 3.5% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price was down 1.8% on a year-over-year basis. https://stats.crea.ca/en-CA/

Highlights: Canadian housing affordability posted a fifth consecutive improvement in Q125. The mortgage payment on a representative home as a percentage of income (MPPI) fell 0.7 percentage point. Seasonally adjusted home prices increased 1.1% in Q125 from Q424; the benchmark mortgage rate (5-year term) declined 15 basis points, while median household income rose 0.8%. Affordability improved in 8 of the ten markets in Q1. On a sliding scale of markets from best progression to least: Vancouver, Toronto, Victoria, Hamilton, Ottawa-Gatineau, Calgary, Winnipeg and Edmonton. On the flip side, Montreal and Quebec deteriorated in the first quarter. Countrywide, affordability enhanced 0.9 pp in the condo portion and 0.7 pp in the non-condo segment. Housing affordability remains a significant challenge for Canadians, though the first quarter of 2025 brought continued relief. Nationally, affordability improved for the fifth consecutive quartermarking the longest such streak since 20082009. This progress brought the mortgage payment as a percentage of income (MPPI) to its lowest level in three years. Despite higher home prices across all markets, affordability gains were more widespread this quarter, supported by rising incomes and declining interest rates. Since peaking in late 2023, 5-year mortgage rates have fallen by a cumulative 91 basis points, reaching their lowest point in nearly three years. However, Montreal and Quebec City were notable exceptions. Home prices surged by 3.0% and 4.2% respectively during the quarter, preventing any affordability improvements. These markets remained resilient despite broader trade uncertainty, supported by less-stretched valuations and a still-strong labour market. Notwithstanding the widespread improvement in Q1, the composite MPPI remains well above its historical average. Anticipating the second quarter, further improvements in affordability from mortgage interest rates are likely to be limited, as the drop in 5-year rates is marginal thus far. However, ongoing weakness in Ontario and British Columbias real estate markets could lead to price drop in several cities. Over the longer term, a slowdown in immigration and softening labour market conditions may also ease pressure on housing demand. Still, resolving market imbalances will take time. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/housing-affordability.pdf

At a Glance In 2025, more first-time home buyers entered the market and about 60% used mortgage loan insurance. Renovation activity is growing, with 55% of homeowners doing renovations in the last 3 years. Websites are still the top source for mortgage information, but social media use has nearly doubled, with YouTube becoming more popular than Facebook. 2025 Housing Market Trends Canadas housing market is changing from more first-time homebuyers to a stronger focus on eco-friendly living. This year, there was an increase in first-time homebuyers. Most of them said they decided to buy because they were financially ready. They had saved up their down payment, qualified for a mortgage and felt prepared to become homeowners. On average, it took homebuyers 3.4 years to save for a down payment, compared to 4.2 years the previous year. Gifted money provided homebuyers with an average of about $80,000 to help them purchase a home. Renovations are gaining momentum. Over half of mortgage consumers completed upgrades within the last 3 years and 75% plan to renovate in the next 5 years (excluding those who dont know). Energy-efficient changes stand out due to high satisfaction levels (93%) and about 80% of homeowners reported saving money on energy bills. Mortgage consumers are turning to new ways to gather information. While websites remain the top choice, social media usage has surged, nearly doubling compared to last year. YouTube has replaced Facebook as the most-used social platform for this purpose. Younger audiences and first-time homebuyers are leading this shift to explore digital channels for advice and insights. https://www.cmhc-schl.gc.ca/blog/2025/a-fresh-look-at-canadas-mortgage-consumers

Survey shows concerns about inflation and their own financial situations increased by 16 points. A special report from the BMO Real Financial Progress Index reveals Canadians concerns about their personal finances have surged amid increased economic uncertainty and market volatility. The survey explored changes in Canadians concerns about their finances and current economic conditions between March and April 2025, and found: Cost of living considerations: 78% reported growing concerns about the cost of living in April a 17-point increase from 61% in March. Inflation concerns intensify Over three quarters (76%) say their concerns about inflation have increased a 16-point increase from 60%. Temperature on tariffs: Concerns about the impact of US tariffs increased from 65% to 74%. Rising recession risks: Canadians concerns about the prospect of economic recession increased from 60% to 74%. Pulse on personal finances: Nearly three in five (58%) say they are more concerned about their financial situation a 16-point increase from the 42% in March. In addition, nearly one quarter (24%) reported in April they are increasingly concerned about the prospect of losing their job. Canadian consumer confidence recently plummeted to the lowest depths in at least six decades on fear that the trade war will cost people their jobs and undermine their financial security. However, sentiment improved modestly in April amid a partial de-escalation of the trade war. A more recent recovery in equity markets should support confidence further in May, said Sal Guatieri, Senior Economist, BMO. While BMO Economics is concerned about the economic impact of tariffs, we are less worried about the inflation outlook, as retaliatory tariffs on imports from the U.S. have been restrained. CPI inflation will likely hold close to the Bank of Canadas 2% target this year, paving the way for some further reductions in policy rates. https://newsroom.bmo.com/2025-06-04-BMO-Survey-Personal-Finance-Concerns-Rose-Significantly-Between-March-to-April-2025

The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%. Since the April Monetary Policy Report, the US administration has continued to increase and decrease various tariffs. China and the United States have stepped back from extremely high tariffs and bilateral trade negotiations have begun with a number of countries. However, the outcomes of these negotiations are highly uncertain, tariff rates are well above their levels at the beginning of 2025, and new trade actions are still being threatened. Uncertainty remains high. While the global economy has shown resilience in recent months, this partly reflects a temporary surge in activity to get ahead of tariffs. In the United States, domestic demand remained relatively strong but higher imports pulled down first-quarter GDP. US inflation has ticked down but remains above 2%, with the price effects of tariffs still to come. In Europe, economic growth has been supported by exports, while defence spending is set to increase. Chinas economy has slowed as the effects of past fiscal support fade. More recently, high tariffs have begun to curtail Chinese exports to the US. Since the financial market turmoil in April, risk assets have largely recovered and volatility has diminished, although markets remain sensitive to US policy announcements. Oil prices have fluctuated but remain close to their levels at the time of the April MPR. In Canada, economic growth in the first quarter came in at 2.2%, slightly stronger than the Bank had forecast, while the composition of GDP growth was largely as expected. The pull-forward of exports to the United States and inventory accumulation boosted activity, with final domestic demand roughly flat. Strong spending on machinery and equipment held up growth in business investment by more than expected. Consumption slowed from its very strong fourth-quarter pace, but continued to grow despite a large drop in consumer confidence. Housing activity was down, driven by a sharp contraction in resales. Government spending also declined. The labour market has weakened, particularly in trade-intensive sectors, and unemployment has risen to 6.9%. The economy is expected to be considerably weaker in the second quarter, with the strength in exports and inventories reversing and final domestic demand remaining subdued. https://www.bankofcanada.ca/2025/06/fad-press-release-2025-06-04/

Understanding the housing use of immigrants and non-permanent residents (NPRs) is important for developing effective housing policies and urban planning strategies. Using 2021 Census data, this study estimates housing unit occupancy ratesdefined as the number of dwellings per 1,000 peoplefor immigrants and NPRs. These rates reflect housing use constrained by factors such as financial resources, living preferences and housing supply availability. The analysis of the 2021 Census data shows that immigrants typically exhibit higher housing occupancy in the ownership and rental markets compared with Canadian-born individuals. On average, immigrants occupy 310 owned units and 151 rental units per 1,000 people, totalling 461 housing units, compared with 397 housing units for Canadian-born individuals. NPRs, meanwhile, occupy 41 owned units and 316 rental units per 1,000 people, for a total of 357 housing units. As immigrants spend more time in Canada, their reliance on the rental market decreases and homeownership increases. In their initial years after admission, immigrants have lower housing occupancy rates than Canadian-born individuals. Over time, however, their housing occupancy rises significantly, driven by a substantial growth in homeownershipunderscoring the lasting impact of immigration on the ownership market. The findings also suggest that an increase in immigration would particularly heighten demand for single-detached homes in the ownership market and for rental apartments, while a rise in NPRs would primarily boost demand for rental apartments. Additionally, immigrants and NPRs are both more likely to own homes in smaller municipalities than in larger municipalities, emphasizing varying impacts of immigrants and NPRs across different municipal contexts. https://www150.statcan.gc.ca/n1/pub/36-28-0001/2025005/article/00003-eng.htm

By TD Economics Key Takeaways: The Bank of Canada is set to make another rate announcement on June 4 TD Economics predicts that the central bank will deliver two more rate cuts this year, though the exact timing is up in the air When the central bank cuts its rate, it can become cheaper for Canadians to borrow money If youre a homeowner with a mortgage or someone looking to buy, youll likely be wondering what the Bank of Canada (BoC) is going to do this year when it comes to interest rates. Thats because whenever the BoC cuts its lending rate, it can become cheaper for Canadians to borrow money. And when the BoC raises its lending rate, it can become more expensive. According to TD Economics, the central bank might offer some rate relief in the coming months. The ongoing softness in the labour market should open the door for the BoC to cut interest rates two more times this year, despite the recent uptick in inflation. Amid trade tensions with the U.S., Andrew Hencic, Director and Senior Economist at TD Economics, said two cuts of 25 basis points each could help support the economy without putting too much more pressure on inflation. That means the current rate of 2.75% could come down to 2.25% by the end of the year. We think that enough slack has accumulated in the economy that theres space for the central bank to cut its lending rate a little bit more without too much inflationary pressure coming through, Hencic said. https://stories.td.com/ca/en/article/bank-of-canada-interest-rate-prediction-june-2025

Canadian households spent an average of $76,750 on goods and services in 2023, up 14.3% from 2021. Amid the recovery from the COVID-19 pandemic, this was the largest two-year increase observed since the series began in 2010. The rise in household spending was partly attributed to consumer inflation, as the Consumer Price Index increased by 10.9% from 2021 to 2023. Shelter accounted for 32.1% of total consumption of goods and services in 2023, followed by transportation (15.8%) and food (15.7%), which remained the three largest spending categories. Household spending on food purchased from restaurants, recreation, and accommodation away from home rebounded and exceeded pre-pandemic levels In 2023, Canadian households spent an average of $12,046 on food, an increase of 16.9% from 2021. Average spending on food purchased from stores was $8,659, up 7.4% from 2021. Following a 21.1% decline from 2019 to 2021, average spending on food purchased from restaurants rose to $3,351 in 2023 as pandemic restrictions eased. Households spent an average of $5,231 on recreation in 2023, up 23.9% from 2021, following an 8.7% decrease from 2019 to 2021. The increase in 2023 was primarily driven by a rebound in spending on recreational services (+120.7%), such as movie theatres, live sporting and performing arts events, and package trips, which aligned with record high operating revenue in the spectator sports, event promoters, artists and related industries sector in 2023. Following a 44.9% decrease from 2019 to 2021, average spending on accommodation away from home, such as hotels and motels, increased to $910 in 2023, rising by 129.2% from 2021 and surpassing the pre-pandemic level of 2019. Homeowners spent more on mortgage payments and condo fees in 2023 In 2023, homeowners spent an average of $27,831 on shelter, up 17.4% from 2021. Homeowners without mortgages spent an average of $13,750 (+7.5%) on shelter, while those with mortgages spent an average of $38,718 (+16.9%). Mortgage payments ($21,342) accounted for more than half of this total and increased by 15.3% from 2021, reflecting in part the impacts of rising interest rates from 2022 to 2023. On average, homeowners with mortgageswho made up more than half of homeownersspent 37.2% of their total consumption on shelter, the highest proportion recorded since 2010. For homeowners, average spending on condo fees was $1,118 in 2023, up 52.9% from 2021, the largest two-year increase rate observed since 2010. Renters spent an average of $18,333 on shelter in 2023, up 20.2% from 2021. Of this total, $15,272 went to rent, up 16.9% from 2021. On average, rent payments accounted for approximately one-quarter of renters total consumption, a proportion that has remained relatively stable since 2010. https://www150.statcan.gc.ca/n1/daily-quotidien/250521/dq250521a-eng.htm

CANADA HOUSING MARKET: TRADE UNCERTAINTY CLOUDING THE INCOME OUTLOOK AND REDUCES HOUSING DEMAND From March to April national sales were essentially unchanged while new listings declined, leading to a marginal rise in the sales-to-new listings ratio over this period. Despite the uptick for this indicator in April, market conditions have significantly eased since the beginning of this year as reflected by the trend decline in this indicator and the rise in the months of inventory almost to its pre-pandemic average. National housing sales stayed relatively stable from March to April, edging down marginally (-0.1%), almost halting their constant decline since November 2024 (with a cumulative drop of 19.2%), the time when the upcoming U.S. administration made clear that imports from Canada and other countries would be slapped with steep tariffs and subsequently followed through with this stated intention. In April, sales were near 18% below their 2015-2024 period average level. National sales were -9.8% lower in April than their level in the same month of 2024. New listings declined -1.0% nationally from March to April but are still at relatively high historical levels, exceeding their 2015-2024 period average by about 7.2%. They increased 1.2% from the same month in 2024. Despite the modest uptick in the sales-to-new listings ratio from March to Aprilfrom 46.4 to 46.8%this indicator has been trending towards the estimated threshold for buyers favourable conditions since November of last year. Indeed, this indicator has eased considerably since the Bank of Canada started hiking its policy rate in March 2022 as sales trended down at a faster pace (a -38.3% cumulative decline since February 2022) than new listings (-5.7%). https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-news-flash.may-15--2025.html

The number of sales recorded over Canadian MLS Systems was unchanged (-0.1%) between March and April 2025, marking a pause in the trend of declining activity since the beginning of the year. Demand is currently hovering around levels seen during the second half of 2022, and the first and third quarters of 2023. At this point, the 2025 Canadian housing story would best be described as a return to the quiet markets weve experienced since 2022, with tariff uncertainty taking the place of high interest rates in keeping buyers on the sidelines, said Shaun Cathcart, CREAs Senior Economist. Given the increasing potential for a rough economic patch ahead, the risk going forward will be if an average number of people trying to sell their homes turns into a large number of people who have to sell their homes, and thats something we have not seen in decades. April Highlights: National home sales were unchanged (-0.1%) month-over-month. Actual (not seasonally adjusted) monthly activity came in 9.8% below April 2024. The number of newly listed properties fell 1% on a month-over-month basis. The MLS Home Price Index (HPI) declined 1.2% month-over-month and was down 3.6% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price was down 3.9% on a year-over-year basis. https://www.crea.ca/media-hub/news/declines-in-canadian-home-sales-take-a-pause-in-april-despite-ongoing-tariff-pressures/

Home sales remained relatively unchanged (-0.1%) from March to April following four monthly contractions. As a result, the number of transactions was 19% below the level in November last year, reversing last years rebound following the central banks interest rate cuts, and roughly in line with the depreciated level of sales observed in 2022. Sales increased in 6 of the countrys 10 provinces: New Brunswick (+5.2%), Manitoba (+3.3%), Quebec (+2.0%), Newfoundland (+1.9%), Nova Scotia (+1.8%), and Ontario (+1.1%). On the other hand, sales declined in B.C. (-2.3%), Alberta (-3.4%), Saskatchewan (-6.3%), and P.E.I. (-6.5%). There is no doubt that the ongoing trade conflict with the U.S. has weighed on consumer confidence and the housing market across the country, with potential buyers waiting for more economic visibility before acting. On the supply side, new listings decreased 1.0% from March to April. Combined with the low level of sales, active listings increased by 1.9% during the month, the fourth monthly advance in a row despite still elevated cancelled listings in April. Overall, the number of months of inventory (active listings-to-sales) increased for the fifth consecutive month, edging up from 5.0 in March to 5.1 in April, its highest level since April 2019 (excluding Covid). Meanwhile, market conditions loosened slightly during the month but remained relatively balanced compared to the historical average. This balanced market condition at the national level is explained by particularly soft conditions in Ontario and B.C., while market conditions in every other province continue to indicate a favourable to sellers market. These looser market conditions have had an impact on prices, with the MLS Home Price Index declining by 1.2% month-over-month and by 3.6% year-over-year. On an annual basis, home sales dropped by 9.8% compared to April 2024, thus reaching their lowest level for that period of the year since 2009. Sales were down in four of the ten provinces: Ontario (- 20.2%), B.C. (-14.6%), Alberta (-11.7%), and Saskatchewan (-10.6%). On the other hand, the sharpest increases were observed in Quebec (+10.0%), Newfoundland (+7.4%), and Manitoba (+6.6%). For the first four months of 2025, cumulative home sales were down 7.2% compared to the same period in 2024. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-canada.pdf

In March, the total value of building permits issued in Canada decreased by $549.4 million (-4.1%) to $12.9 billion. The decrease was led by the non-residential sector (-$716.3 million), and it was tempered by the residential sector (+$166.9 million). On a constant dollar basis (2017=100), the total value of building permits issued in March decreased 5.1% from the previous month and was up 11.1% on a year-over-year basis. Single-family permits slow residential sector growth Residential construction intentions in Canada increased $166.9 million (+2.0%) in March to reach $8.7 billion. A gain in the multi-family component (+$322.5 million to $5.9 billion) was partially offset by a decline in the single-family component (-$155.6 million to $2.8 billion). The rise in the multi-family component in March was particularly strong in British Columbia (+$397.8 million), driven by the Vancouver census metropolitan area (CMA) (+$652.3 million). Meanwhile, the single-family component decrease was primarily observed in Ontario (-$185.7 million) and was supported by Quebec (-$26.0 million). Overall, 22,800 multi-family dwellings and 4,400 single-family dwellings were authorized for construction in March, representing a 4.6% increase from the previous month. https://www150.statcan.gc.ca/n1/daily-quotidien/250514/dq250514a-eng.htm

A stable and efficient financial system is essential for sustaining economic growth and raising standards of living. In the Financial Stability Report, the Bank of Canada assesses the resilience of the Canadian financial system and focuses on key risks that could undermine its stability. Ultimately, financial stability benefits all Canadians. Key takeaways Canadas financial system is resilient. Overall, households, businesses, banks and non-bank financial intermediaries successfully weathered the pandemic, a period of elevated inflation, and sharp increases in interest rates. Over the past 12 months, Canadian households have been carrying, on average, less debt relative to their income, and insolvency filings by businesses have dropped significantly. But there are pockets of financial stress. The economic impacts of the pandemic, as well as elevated housing prices due to persistent imbalances in the housing market, have led to higher levels of debt for some households and businesses. This has made them more vulnerable to financial shocks. Because Canadian households and businesses have remained resilient overall, financial institutions have not come under stress. Canadian banks have generally maintained elevated capital buffers and have increased provisions for credit losses. Liquidity levels have remained high, and access to funding has continued to be strong. Recently, large and abrupt shifts in the direction of US trade policy have led to some bouts of extreme market volatility, including in the normally low-risk market for US Treasuries. This volatility tested the resilience of market participantsparticularly non-bank financial intermediaries deploying arbitrage strategies in the US Treasury market. The trade war currently threatens the Canadian economy and poses risks to financial stability. Near-term unpredictability of US trade and economic policy could cause further market volatility and a sharp repricing in assets, leading to strains on liquidity. In extreme circumstances, market volatility could turn into market dysfunction. In the medium to long term, a prolonged global trade war would have severe economic consequences. It would reduce economic growth and increase unemployment. Some households and businesses would be unable to continue making debt payments. If household and business credit defaults were to occur on a large scale, banks could see greater losses than they have provisioned for. This could lead them to pull back on lending, potentially exacerbating economic and financial stress. The Bank of Canada is watching developments closely and remains in regular contact with financial system participants and with other financial authorities in Canada and globally. A stable and resilient financial systemone that absorbs shocks and does not amplify themcan help the economy through periods of turbulence. https://www.bankofcanada.ca/2025/05/financial-stability-report-2025/

Half believe owning a home is less attainable than in 2024. 43% of homeowners say they could not have purchased their home without family assistance. The latest BMO Real Financial Progress Index reveals that while over two thirds (67%) of homebuyers are waiting for interest rates to drop before purchasing a home a 5% decrease from 2024 experts say many more Canadians may take a wait and see approach as concerns about the prospect of an economic recession increased from 60% to 74% from March to April 2025. Canadas housing market remained under pressure heading into the spring, with sales and prices both weakening further, said Robert Kavcic, Senior Economist, BMO Capital Markets. There is some clear underlying weakness as inventory builds and investors remain absent. Suffice it to say, homebuyers are losing confidence and motivation, especially in areas of B.C. and Southern Ontario. The BMO survey examines how concerns about the economy have influenced Canadians homebuying decisions: Revisiting Rates: Over two-thirds (67%) of prospective homeowners believe rates affect their buying decisions. Two in five (38%) Canadians are waiting for rates to drop to 3% or lower before purchasing or refinancing home. In addition, 44% admit they are unsure about the rate they would be comfortable with to move forward with buying or refinancing their home. Missed Momentum: When looking at the current housing market, 56% of prospective homeowners feel they missed their moment to buy a home. Two-thirds (66%) of Millennials feel they had missed their homebuying moment more than any other generation. Challenged Confidence: While 59% of Canadians believe homeownership is one of their greatest life aspirations, half (50%) believe owning a home is less attainable than it was 12 months ago, and two-thirds (66%) are less confident that they will own a home in their lifetime compared to five years ago. Deferred Demand: Among the 38% of homebuyers planning on purchasing a home in the near future, only 14% plan to in 2025 and a quarter (24%) plan on doing so in 2026 or later. Location, Location, Location: More than half (52%) of aspiring homebuyers would consider moving to a different province or country in order to afford buying a home. https://newsroom.bmo.com/2025-05-05-BMO-Survey-Rising-Recession-Concerns-Among-Canadians-Sidelining-Prospective-Homebuyers

Canadian home sales fell on a month-over-month basis once again in March 2025, as rising tariff turmoil and uncertainty is keeping home buyers on the sidelines. Sales activity recorded over Canadian MLS Systems sank 4.8% month-over-month in March 2025. Along with declines in each of the three previous months, national home sales are now down 20% from their recent high recorded last November. Up until this point, declining home sales have mostly been about tariff uncertainty. Going forward, the Canadian housing space will also have to contend with the actual economic fallout. In short order weve gone from a slam dunk rebound year to treading water at best, said Shaun Cathcart, CREAs Senior Economist. While the largest of these declines have been seen in Ontario and British Columbia, sales are down over the last few months in all but a handful of small markets across the country. On a non-seasonally adjusted basis, the overall Canadian sales total for March 2025 fell 9.3% year-over-year and was the lowest for that month since 2009. https://stats.crea.ca/en-CA/

Home sales fell by 4.8% between February and March, the fourth consecutive monthly drop in a row for this indicator. Following this decline, the number of transactions was 20% below the level in November last year, reversing last years rebound following the central banks interest rate cuts. Milder weather in March, particularly in the eastern provinces, failed to stimulate the housing market, as sales declined in 8 of the countrys 10 provinces, with P.E.I. (+2.7%) and Saskatchewan (+0.3%) being the exceptions. Newfoundland (-12.9%), New Brunswick (-8.7%), Ontario (-7.1%), B.C. (-7.0%), and Manitoba (-5.2%) experienced above-average declines in sales, while Nova Scotia (-4.5%), Quebec (-3.1%), and Alberta (-0.6%) experienced smaller drops. There is no doubt that the ongoing trade war with the U.S. has weighed on consumer confidence and the housing market across the country, with potential buyers waiting for more economic visibility before acting. On the supply side, new listings rebounded 3.0% from February to March following an 11.9% decrease the previous month. Combined with the decrease in sales, active listings increased by 3.3% during the month, the third monthly advance in a row despite still elevated cancelled listings in March. Overall, the number of months of inventory (active listings-to-sales) increased for the fourth consecutive month, jumping from 4.7 in February to 5.1 in March, its highest level since April 2019 (excluding Covid). Meanwhile, market conditions loosened sharply during the month and moved from slightly tighter than their historical average to looser than average for the first time since June 2019 (excluding Covid). This was mainly due to a sharp softening in market conditions in Ontario and B.C., which are now deep into favourable to buyers territory. All other provinces are still showing tighter than average market conditions. These suppler market conditions have had an impact on prices, with the MLS Home Price Index declining by 1.0% month-over-month and by 2.1% year-over year. On an annual basis, home sales dropped by 9.3% compared to March 2024, thus reaching their lowest level for that period of the year since 2009. Sales were down in four of the ten provinces, with the biggest decreases in Ontario (-24.6%) and B.C. (-9.6%), while the sharpest increases were observed in P.E.I. (+13.5%), Newfoundland (+9.7%), and Quebec (+9.1%). For the first quarter of 2025, cumulative home sales were down 6.3% compared to the same period in 2024. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-canada.pdf

The Canadian economy ended 2024 strong. However, the escalating trade conflict is diminishing growth prospects. While tariffs are expected to increase price pressures, removing the consumer carbon tax has lowered energy prices. The unpredictability of US trade policy, and the speed and magnitude of the shifts, are making the economic outlook very uncertain. In February and March 2025, the United States repeatedly threatened, imposed and then suspended tariffs on Canada and Mexico. Significant US tariffs remain in place, particularly on steel, aluminum and motor vehicles. Then, on April 2, the United States announced high and broad-based tariffs on nearly all its other trading partners. One week later, on April 9, it reduced most of those tariffs for 90 days to a 10% universal rate. This universal tariff does not apply to Canada and Mexico. There is a great deal of uncertainty around what will happen next. Trade policy uncertainty is making it difficult for households, businesses and governments to plan. It is also difficult to know how the tariffs will affect the economy. Consequently, it is unusually challenging to project economic activity and consumer price index (CPI) inflation in Canada and globally. Instead of a base-case projection, this Report contains two illustrative scenarios that consider different US trade policies. In addition, the Risks section focuses on the uncertainty related to how tariffs will impact the economy. The Bank of Canada has chosen this approach to better manage the risks in this highly uncertain environment. https://www.bankofcanada.ca/publications/mpr/mpr-2025-04-16/

The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%. The major shift in direction of US trade policy and the unpredictability of tariffs have increased uncertainty, diminished prospects for economic growth, and raised inflation expectations. Pervasive uncertainty makes it unusually challenging to project GDP growth and inflation in Canada and globally. Instead, the April Monetary Policy Report (MPR) presents two scenarios that explore different paths for US trade policy. In the first scenario, uncertainty is high but tariffs are limited in scope. Canadian growth weakens temporarily and inflation remains around the 2% target. In the second scenario, a protracted trade war causes Canadas economy to fall into recession this year and inflation rises temporarily above 3% next year. Many other trade policy scenarios are possible. There is also an unusual degree of uncertainty about the economic outcomes within any scenario, since the magnitude and speed of the shift in US trade policy are unprecedented. Global economic growth was solid in late 2024 and inflation has been easing towards central bank targets. However, tariffs and uncertainty have weakened the outlook. In the United States, the economy is showing signs of slowing amid rising policy uncertainty and rapidly deteriorating sentiment, while inflation expectations have risen. In the euro area, growth has been modest in early 2025, with continued weakness in the manufacturing sector. Chinas economy was strong at the end of 2024 but more recent data shows it slowing modestly. Financial markets have been roiled by serial tariff announcements, postponements and continued threats of escalation. This extreme market volatility is adding to uncertainty. Oil prices have declined substantially since January, mainly reflecting weaker prospects for global growth. Canadas exchange rate has recently appreciated as a result of broad US dollar weakness. https://www.bankofcanada.ca/2025/04/fad-press-release-2025-04-16/

The Canadian Survey of Consumer Expectations was conducted through an online panel from January 29 to February 19, 2025. Follow-up phone interviews took place from February 20 to 25, 2025. This period was characterized by pervasive uncertainty created by the sudden and unpredictable shifts in US trade policy. Overview Overall, results of the first-quarter 2025 survey show that the escalating trade conflict with the United States is damaging consumer sentiment. Confidence in the labour market has weakened sharply. This is because many consumersnotably those working in sectors that are highly dependent on tradeare worried about losing their job. In this context, consumers have also become more pessimistic about their financial health. Although consumption plans had been improving over several quarters, consumers now intend to spend more cautiously given the uncertainty around the trade conflict. In addition, elevated housing costs and the high prices of many goods and services continued to weigh on households spending plans. Consumers expect the trade conflict to lead to a higher cost of living. This is reflected in their short-term inflation expectations, which rose in the first quarter of 2025. https://www.bankofcanada.ca/2025/04/canadian-survey-of-consumer-expectations-first-quarter-of-2025/

By TD Economics The one-two punch of winter storms and tariff-related economic uncertainty sent a chill through Canadian housing markets in the first quarter. Were now tracking a double-digit quarterly decline in Canadian home sales and a mid-single digit drop in Canadian average home prices. These outcomes are much weaker than our pre-Trump inauguration forecast made in December, where we assumed that a loosening in federal mortgage rules, lower interest rates and continued economic growth would fuel a modest Q1 gain in sales and prices. This much softer starting point has us led to materially mark down our 2025 annual average growth forecasts for Canadian home sales and prices. Moving forward, its unlikely that activity will be as weak as it was in the first quarter. However, we still think that elevated uncertainty and a deteriorating jobs market will yield subdued sales and price growth for much of 2025. 2025 home price forecasts have been cut the most in B.C. and Ontario, where we now think that prices will decline in annual average terms this year. This reflects muted demand conditions in both markets and supply/demand balances that are heavily skewed in the favour of buyers. Of note, the GTA condo market is particularly soft, which will weigh on prices in Ontario this year. Elsewhere, 2025 quarterly price growth forecasts have been marked down to sub-trend levels in other parts of the country. Were retaining our view that quarterly price gains will outperform in the Prairies moving forward given relatively tight supply/demand balances and comparatively better affordability. An improving backdrop should set the stage for a notable rebound in home sales and average home prices in 2026. Specially, hiring should improve as were assuming a dialing back in tariff-related uncertainty . At the same time, interest rates should be at multi-year lows. These factors will facilitate the release of significant pent-up demand. However, the scale of bounce-back in Canadian average home prices will likely be restrained by poor affordability in key markets like B.C. and Ontario. https://economics.td.com/ca-provincial-housing-outlook

Owning a home remains a critical source of wealth accumulation for many Canadian families, with real estate equity representing 42% of overall household wealth in 2023. The link between homeownership and wealth creation is even more pronounced for younger families, with housing assets accounting for nearly half of total wealth. As housing affordability deteriorated, the barriers to homeownership have become increasingly prohibitive, particularly for those without familial support. In 2019, 3 in 10 homeowners reported receiving an inheritance at a median value of $67,000, while 2 in 10 renters received a median value of $33,000. As home values appreciated strongly throughout the COVID-19 pandemic period, so too did inheritances for homeowners. By 2023, the median inheritance Canadian homeowners received had risen to $85,100. A looming wave of interfamilial wealth transfers is set to occur as baby boomers age, putting those with familial means in a more secure financial situation than those without. A wealth transfer in the form of an inheritance, whether from a living or deceased relative, is just one way many homeowners have benefited from familial support when entering the housing market. Other forms of assistance, such as receiving partial or full downpayment gifts, borrowing from family members rather than a bank, or receiving intergenerational property transfers, are also potentially important forms of familial support and are reported in Statistics Canadas Survey of Financial Security. Across all age cohorts, 5% of families were living in a home that was acquired in full or in part from a gift or an inheritance, and 9% reported that at least some of the downpayment for their home had been from a gift or an inheritance. When combined with those who borrowed from family and friends rather than a financial institution to purchase their home, the overall share of homeowners who benefited from an inheritance or other types of familial support to enter the housing market rose to 4 in 10. https://www150.statcan.gc.ca/n1/pub/36-28-0001/2025003/article/00001-eng.htm

From Scotiabank HIGHLIGHTS Canadas housing market has been on a roller coaster ride since the pandemic as reflected by the profile for real private investment in residential structures, housing starts, sales and prices over this period. Housing affordability worsened significantly over this period with house prices reaching historical highs and mortgage rates increasing with the tightening in monetary policy since early 2022. Indeed, over this 5-year period home ownership affordability pressures have reached degrees like those witnessed in the early 1980s. Using Scotiabank Economics macro-econometric model of the Canadian and U.S. economies, we estimate that tightening supply constraints in construction from 2019Q3 to 2024Q4reflecting weakening productivity and rising construction material costsand above-normal population growth since 2022 each contributed to raise the benchmark MLS Home Price Index (HPI) a bit more than $50,000 over that 5-year period. This implies that if supply constraints had not tightened and population growth had stayed near its long-term average, the benchmark MLS HPI would have been slightly below $616,000 instead of the near $719,500 posted for 2024Q4. Our assessment and results strongly press the need to work on improving productivity to achieve housing affordability. Indeed, reducing bureaucratic burdens will also make housing supply more responsive to demand, thereby reducing price increases for a given rise in demand in the future. From 2024 to 2026, weaker population growth and uncertainty about trade barriers and their economic impact will reduce demand for homeownership. We forecast housing resale activity will slow in 2025 and 2026, declining from near 483,000 in 2024 to about 459,000 in 2026. Tight supply constraints will contribute to raise house prices especially in 2026 and mitigate progress on affordability from the past decline in interest rates and robust growth in real income. We expect the MLS House Price Index to rise by 0.4% in 2025 and 7% in 2026 with still-elevated supply constraints and pressure from the existing dwelling shortage. Of course, this expected profile for housing sales, starts and prices would be weaker if additional tariffs announced by the U.S. turn out more important than assumed in this forecast. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-note.housing-note--march-19-2025-.html

Canadian Housing Survey shows women are more likely than men to be in core housing need. Overall, women were more likely to be in core housing need than men. Women experienced higher rates of core housing need in almost all age groups. However, the disparity was greatest between senior women and senior men over the age of 75. Racialized women had higher rates of core housing need than non-racialized women. Women-led, one-parent households had higher rates of core housing need than men-led, one-parent households. Women living alone not in a census family were more likely to be in core housing need than couples with and without children. Core housing need highlights the challenges many Canadians face in finding safe, suitable and affordable housing. Core housing need occurs when a household falls short of one or more housing standards adequacy, suitability or affordability and would need to spend 30% or more of its before-tax income to access housing that meets all 3 standards. Core housing need rates are often provided at the household level as the impact is felt by all individuals living in the household. According to the Canadian Housing Survey, approximately 1.7 million households (11.2%) were assessed to be in core housing need in 2022. This translates to approximately 3.3 million individuals (9.1%). https://www.cmhc-schl.gc.ca/blog/2025/core-housing-need-gender

By TD Economics Weve slashed our real GDP growth forecasts for this year from coast-to-coast, reflecting the impact of the Canada-U.S. trade war. Solid Q1 activity across regions will buffer annual averages, but we foresee a mild recession unfolding for Canada in the middle-part of this year. Our forecast assumes that Canadas exports to the U.S. will face a 12.5% effective tariff rate for six months, lowered to 5% in Q4-2025 and held there through the projection horizon. We expect Canada to retaliate with their $155 billion package over the next two quarters before paring back to $30 billion. Across provinces, Quebec and Ontario are especially exposed to tariff risks given their outsized manufacturing sectors. However, Quebecs public sector is also quite large, and is less directly exposed. New Brunswick, meanwhile, is heavily reliant on the U.S. as an export destination. On the flipside, U.S.-bound shipments make up only a small share of GDP in Nova Scotia and B.C., while a lower 10% tariff on energy exports will likely soften the blow in Albertas case. The commodities backdrop, especially crude oil, is softening due to the prospect of slowing global demand growth. WTI prices have been revised lower, impacting profitability and investment in key resource-producing provinces. Our forecast builds in assumed support from government stimulus. So far, weve received budgets from Nova Scotia, B.C., and Alberta. For the most part, growth-supporting efforts have focused on infrastructure spending and allocating funds for trade-war related contingencies. Alberta, however, will roll out a sizeable tax cut for households this year. Provinces are also retaliating to through various measures, including the elimination of U.S. alcohol purchases. Weve downgraded our annual average housing forecasts for nearly every province this year (Newfoundland and Labrador gets a reprieve given solid momentum heading into 2025). Q1-25 performances were weak across most provinces. Part of this can be traced to severe winter storms in February, although tariff-related economic uncertainty is probably weighing. A subdued performance is likely in the cards for the bulk of 2025, before an improving jobs market, pent-up demand and waning uncertainty drives a better outcome in 2026. https://economics.td.com/provincial-economic-forecast

Home sales dropped by 9.8% between January and February, the third monthly contraction in a row and the strongest decline since May 2022 when the Bank of Canada was tightening its monetary policy aggressively. On the supply side, new listings down 12.7% from January to February following a 14.8% jump the previous month. Active listings increased by 3.4% from January to February, the third monthly advance in a row. Combined with the decrease in sales, the number of months of inventory (active listings-to-sales) increased for the third consecutive month, jumping from 4.1 in January to 4.7 in February, its highest level since June 2019 (excluding Covid). Market conditions loosened sharply during the month and moved from tighter than their historical average to balanced. This was mainly due to a sharp softening in market conditions in Ontario and B.C., which are now in favourable to buyers territory. On the other hand, all other provinces are still showing tighter than average market conditions. Housing starts decreased by 4% (-10.3K) in February to 229.0K (seasonally adjusted and annualized), a print below the median economist forecast calling for 246K units. The monthly loss was driven by a decrease in urban starts (-10.3K to 209.8K) while rural starts were flat (at 19.2K). In urban centres, the regression was observed in the multi-unit segment (-9.8K to 166.5K), while starts edged down in the single-detached segment (-0.5K to 43.3K). The TeranetNational Bank Composite National House Price Index decreased by 0.1% from January to February after seasonal adjustment. Three of the 11 markets in the composite index were down during the month: Victoria (-1.4%), Vancouver (-0.9%) and Toronto (-0.5%). Conversely, prices rose in Halifax (+2.8%), Winnipeg (+0.9%), Montreal (+0.9%), Edmonton (+0.9%), Calgary (+0.8%), Quebec City (+0.6%), Ottawa-Gatineau (+0.3%) and Hamilton (+0.2%). https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/logement/economic-news-resale-market.pdf

Canadian home sales fell sharply from January to February, as home buyers remained on the sidelines in the first full month of the ongoing trade war with the United States. Sales activity recorded over Canadian MLS Systems dropped 9.8% month-over-month in February 2025, marking the lowest level for home sales since November 2023, and the largest month-over-month decline in activity since May 2022. The moment tariffs were first announced on January 20, a gap opened between home sales recorded this year and last. This trend continued to widen throughout February, leading to a significant, but hardly surprising, drop in monthly activity, said Shaun Cathcart, CREAs Senior Economist. This is already being reflected in renewed price softness, particularly in Ontarios Greater Golden Horseshoe region. Declines were broad-based, with sales falling in about three-quarters of all local markets and in almost all large markets. The trend was most pronounced in the Greater Toronto Area and surrounding Great Golden Horseshoe regions. February Highlights: National home sales dropped 9.8% month-over-month. Actual (not seasonally adjusted) monthly activity came in 10.4% below February 2024. The number of newly listed properties fell back 12.7% month-over-month. The MLS Home Price Index (HPI) declined 0.8% month-over-month and was down 1% on a year-over-year basis. The actual (not seasonally adjusted) national average sale price fell 3.3% on a year-over-year basis. https://stats.crea.ca/en-CA/

Decision Details: The Bank of Canada lowered its target for the overnight rate by 25 basis points to 2.75%, in line with a nearly unanimous consensus and market pricing. This is the 7th consecutive cut, bringing cumulative rate relief to 225 basis points since June 2024. At 2.75%, the policy rate is equal to the mid-point of the BoCs estimated neutral range (2.25% to 3.25%) The BoCs overnight target is now 175 basis points below the Feds upper bound policy target (the largest rate gap since 1997) As was the case in January, the Bank will set the deposit rate 5 basis points below the target rate (2.70%). The Bank rate will remain 25 basis points above the overnight target (3.00%). Rate Statement Opening to the Press Conference: Driving the decision to cut 25 bps was inflation close to 2% and pervasive uncertainty created by continuously changing US tariff threats. This is restraining consumers spending intentions and businesses plans to hire and invest. Note that in January, the Bank cited excess supply in the economy as contributing to that decision to ease. Theres no reference to excess supply or an output gap today. Not surprisingly, the Bank didnt commit to any particular rate path. However, theyve stressed that theyll have to proceed carefully with any further changes to our policy rate. Thats because there are upward pressures on inflation from higher costs along with the downward pressures from weaker demand.. The Bank notes that the economy entered 2025 in a solid position with robust GDP growth, stronger than their earlier assessment. That said, growth in Q1 will likely slow as the intensifying trade conflict weighs on sentiment and activity. Export growth, however, could come in strong as US importers front loaded orders ahead of tariffs. As for the labour market, the statement notes the hiring pick-up from November to January but acknowledged Februarys. They add there are warning signs that trade tensions could disrupt the job market recovery. On wage growth, they see signs of moderation. The Bank highlights that headline inflation is close to the 2% target. The federal tax holiday has muddied the inflation picture, but the Bank notes inflation will be around 2.5% after the tax break. Again, the statement downplays above-target core inflation measures which are occurring because of the persistence of shelter price inflation. The Bank also stressed that short-term inflation expectations have risen. In an accompanying release, the BoC provided insight into how Canadian businesses and households are reacting to the trade conflict. The report highlighted consumer spending caution (plans to defer large purchases and increase precautionary savings), job security worries (especially in industries directly relying on exports to the U.S.), and a subdued business outlook. The BoC highlighted that businesses are reducing hiring/investment plans on the basis of heightened trade uncertainty, while both consumers and businesses are expecting prices to increase over the next year. While the opening remarks to the presser mention that the economic activity impact from tariffs is largely yet to be seen, uncertainty is already weighing considerably on business and consumer intentions. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/boc-policy-monitor.pdf