July 23, 2025 • 6 mins
In this episode, the conversation opens with a welcome and overview, followed by a sponsor message from Real Approved Inc. The discussion delves into Canadian housing affordability trends and the Bank of Canada's interest rate strategy. The impact of US-Canada trade tensions on mortgage rates is explored, along with insights from Oxford Economics on the housing market outlook. The episode examines housing starts, resale activity, and challenges in the condo market. Macroeconomic risks and global policy shifts are also discussed, providing a comprehensive view of the current landscape. The episode concludes with closing remarks and a sponsor message from Real Approved Inc.
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Transcript
Episode Transcript
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(00:00):
Welcome to the Ontario Mortgage & Real EstateInsights Podcast, your go-to source for the
(00:05):
latest developments, trends, and regulatorychanges in the industry.
I'm your host, Steve Hamoen, here to provideyou with insights sourced from reputable news
outlets to help you stay informed and makewell-informed decisions.
This podcast is brought to you by Real ApprovedInc., a trusted mortgage brokerage dedicated to
(00:26):
helping Canadians achieve their homeownershipdreams.
Visit realapproved.ca to learn more about howour experienced team can assist you with your
mortgage needs.
Let's dive into today's episode.
Today, we're diving into the latest findings onCanadian housing affordability, which,
unfortunately, took a turn for the worse inJune.
(00:46):
It's affecting 12 out of 13 major markets, withonly one city bucking the trend.
That's right, Steve.
The report from Ratehub.ca reveals asignificant increase in the income required to
purchase a home across Canada.
Rising mortgage rates and home prices aremaking it harder for many Canadians to achieve
their homeownership dreams.
(01:08):
The average mortgage stress test rate climbedto 6.48% in June, just a slight increase from
May, but enough to impact potential buyers.
Jamie David from Ratehub.ca pointed out thatthe difficulty in homeownership is exacerbated
by the Bank of Canada's rate hikes and cutsaimed at controlling inflation.
And we can't forget about the specificchallenges faced by cities like St.
(01:31):
John's, Newfoundland and Labrador.
They saw the most significant shift, withaverage home prices jumping by $9,500, and the
required qualifying income increasing to$88,910.
It's a tough situation for prospective buyersthere.
Indeed, Janine.
(01:51):
Other cities like Fredericton, New Brunswick,and Ottawa, Ontario, are also feeling the pinch
with similar increases in required income.
The interplay between inflation, interestrates, and housing demand is complex, and the
Bank of Canada is treading carefully.
With the Bank of Canada holding its overnightrate at 2.75% for the second consecutive time,
(02:13):
they're clearly adopting a cautious approach.
Analysts aren't expecting a rate cut anytimesoon, which means Canadian homebuyers might not
see relief in borrowing costs in the nearfuture.
And let's not forget the trade tensions southof the border.
The escalation in the trade war under USPresident Donald Trump has pushed fixed
(02:33):
mortgage rates up recently, adding anotherlayer of complexity to the situation.
But amidst all this, Toronto is a bit of anoutlier.
It was the only major market to see animprovement, with a $17,700 drop in average
home prices, which reduced the income needed toqualify for a mortgage by $1,160.
(02:56):
It's a small relief in a challenging nationalcontext.
Now, let's shift gears and talk about therecent warning from Oxford Economics regarding
Canada's housing market.
They're projecting that the housing slump couldextend into 2026 unless there's a resolution to
the ongoing trade tensions with the UnitedStates.
(03:17):
It's a concerning outlook, Steve.
Falling prices, slower construction, andinvestor strain are all pointing to a prolonged
downturn.
Oxford highlights the impact of higherborrowing costs and weakening consumer
confidence, which are key contributors to thissituation.
Michael Davenport, a Senior Economist at OxfordEconomics, mentioned that unit sales across the
(03:40):
country have been at very low levels.
They're estimating an 8 to 10 percentpeak-to-trough price correction in the most
expensive markets, with notable declines inGreater Toronto and Greater Vancouver.
And on a national level, resale activity isabout 15 percent below the five-year average.
The sales-to-new-listings ratio is holding near50, which suggests a balanced market, but it's
(04:03):
a significant drop from the highs we saw duringthe pandemic.
While resale markets weaken, new constructionhas been somewhat resilient, although it's
trending downward as well.
Oxford expects national housing starts to fallto around 225,000 units in 2025, compared to
245,000 in 2024, and well below the peak of275,000 in 2021.
(04:28):
The condo market is particularly challengingright now.
Tony Stillo, Director of Canada Economics,pointed out that prices need to fall for units
to move, which means investors might have totake a loss.
Affordability issues are also pushing buyers torely on family funds for down payments.
Beyond the housing market, Oxford Economics isemphasizing the macroeconomic risks tied to the
(04:53):
trade tensions with the United States.
Exports to the U.S.
have significantly dropped, and combined withtariff-driven price pressures, a contraction in
Canadian GDP is expected in the latter half of2025.
It's a complex situation, Steve.
Oxford mentions that the Bank of Canada haslimited room to maneuver with rates already
(05:13):
near neutral levels.
Even if they were to cut rates, it might onlybe by a quarter to half a point.
The broader economic outlook is influenced byinternational ties and global policy shifts.
The ongoing trade war is at a crossroads, withthe potential for a deal or a shift toward more
managed trade.
And looking ahead, Canada may explorealternative trade options with countries like
(05:36):
China, India, and the European Union, thoughthese come with their own risks and delays.
Energy exports could play a key role, butdiversification will take time.
Thanks for tuning in to another episode of theOntario Mortgage & Real Estate Insights
Podcast.
We hope you found today's insights valuable asyou navigate the world of mortgages and real
(05:58):
estate.
Before you go, a quick reminder (05:59):
Real Approved is here to make your mortgage journey smoother.
Whether you're buying your first home orrefinancing, their experienced team is ready to
guide you with personalized support every stepof the way.
Visit realapproved.ca to get started and takethe next step toward achieving your
(06:21):
homeownership goals.
Catch you next time, and stay informed with thelatest industry insights!
Welcome to the Ontario Mortgage & Real EstateInsights Podcast, your go-to source for the
(00:05):
latest developments, trends, and regulatorychanges in the industry.
I'm your host, Steve Hamoen, here to provideyou with insights sourced from reputable news
outlets to help you stay informed and makewell-informed decisions.
This podcast is brought to you by Real ApprovedInc., a trusted mortgage brokerage dedicated to
(00:26):
helping Canadians achieve their homeownershipdreams.
Visit realapproved.ca to learn more about howour experienced team can assist you with your
mortgage needs.
Let's dive into today's episode.
Today, we're diving into the latest findings onCanadian housing affordability, which,
unfortunately, took a turn for the worse inJune.
(00:46):
It's affecting 12 out of 13 major markets, withonly one city bucking the trend.
That's right, Steve.
The report from Ratehub.ca reveals asignificant increase in the income required to
purchase a home across Canada.
Rising mortgage rates and home prices aremaking it harder for many Canadians to achieve
their homeownership dreams.
(01:08):
The average mortgage stress test rate climbedto 6.48% in June, just a slight increase from
May, but enough to impact potential buyers.
Jamie David from Ratehub.ca pointed out thatthe difficulty in homeownership is exacerbated
by the Bank of Canada's rate hikes and cutsaimed at controlling inflation.
And we can't forget about the specificchallenges faced by cities like St.
(01:31):
John's, Newfoundland and Labrador.
They saw the most significant shift, withaverage home prices jumping by $9,500, and the
required qualifying income increasing to$88,910.
It's a tough situation for prospective buyersthere.
Indeed, Janine.
(01:51):
Other cities like Fredericton, New Brunswick,and Ottawa, Ontario, are also feeling the pinch
with similar increases in required income.
The interplay between inflation, interestrates, and housing demand is complex, and the
Bank of Canada is treading carefully.
With the Bank of Canada holding its overnightrate at 2.75% for the second consecutive time,
(02:13):
they're clearly adopting a cautious approach.
Analysts aren't expecting a rate cut anytimesoon, which means Canadian homebuyers might not
see relief in borrowing costs in the nearfuture.
And let's not forget the trade tensions southof the border.
The escalation in the trade war under USPresident Donald Trump has pushed fixed
(02:33):
mortgage rates up recently, adding anotherlayer of complexity to the situation.
But amidst all this, Toronto is a bit of anoutlier.
It was the only major market to see animprovement, with a $17,700 drop in average
home prices, which reduced the income needed toqualify for a mortgage by $1,160.
(02:56):
It's a small relief in a challenging nationalcontext.
Now, let's shift gears and talk about therecent warning from Oxford Economics regarding
Canada's housing market.
They're projecting that the housing slump couldextend into 2026 unless there's a resolution to
the ongoing trade tensions with the UnitedStates.
(03:17):
It's a concerning outlook, Steve.
Falling prices, slower construction, andinvestor strain are all pointing to a prolonged
downturn.
Oxford highlights the impact of higherborrowing costs and weakening consumer
confidence, which are key contributors to thissituation.
Michael Davenport, a Senior Economist at OxfordEconomics, mentioned that unit sales across the
(03:40):
country have been at very low levels.
They're estimating an 8 to 10 percentpeak-to-trough price correction in the most
expensive markets, with notable declines inGreater Toronto and Greater Vancouver.
And on a national level, resale activity isabout 15 percent below the five-year average.
The sales-to-new-listings ratio is holding near50, which suggests a balanced market, but it's
(04:03):
a significant drop from the highs we saw duringthe pandemic.
While resale markets weaken, new constructionhas been somewhat resilient, although it's
trending downward as well.
Oxford expects national housing starts to fallto around 225,000 units in 2025, compared to
245,000 in 2024, and well below the peak of275,000 in 2021.
(04:28):
The condo market is particularly challengingright now.
Tony Stillo, Director of Canada Economics,pointed out that prices need to fall for units
to move, which means investors might have totake a loss.
Affordability issues are also pushing buyers torely on family funds for down payments.
Beyond the housing market, Oxford Economics isemphasizing the macroeconomic risks tied to the
(04:53):
trade tensions with the United States.
Exports to the U.S.
have significantly dropped, and combined withtariff-driven price pressures, a contraction in
Canadian GDP is expected in the latter half of2025.
It's a complex situation, Steve.
Oxford mentions that the Bank of Canada haslimited room to maneuver with rates already
(05:13):
near neutral levels.
Even if they were to cut rates, it might onlybe by a quarter to half a point.
The broader economic outlook is influenced byinternational ties and global policy shifts.
The ongoing trade war is at a crossroads, withthe potential for a deal or a shift toward more
managed trade.
And looking ahead, Canada may explorealternative trade options with countries like
(05:36):
China, India, and the European Union, thoughthese come with their own risks and delays.
Energy exports could play a key role, butdiversification will take time.
Thanks for tuning in to another episode of theOntario Mortgage & Real Estate Insights
Podcast.
We hope you found today's insights valuable asyou navigate the world of mortgages and real
(05:58):
estate.
Before you go, a quick reminder (05:59):
Real Approved is here to make your mortgage journey smoother.
Whether you're buying your first home orrefinancing, their experienced team is ready to
guide you with personalized support every stepof the way.
Visit realapproved.ca to get started and takethe next step toward achieving your
(06:21):
homeownership goals.
Catch you next time, and stay informed with thelatest industry insights!
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