Real Estate Foresight

06/01/2026

There’s a monopoly on home construction screwing over America. The biggest builders work with Wall St. to maximize profits, at the expense of everyone who wa...

05/31/2026

The Greater Toronto Area housing market is undergoing a massive shift, and single-family homeowners are feeling the impact. While zoning reforms like multipl...

05/27/2026

Posthaste: Canada 'stands out' on this economic surprise index — just not in a good way. Canada may stand out on the global economic surprise index, but it’s for posting poor results, say National Bank of Canada economists.
“Disappointing economic data is not a global phenomenon right now,” Taylor Schleich and Ethan Currie said in a note on Tuesday. “Canada stands out as an underperformer among major economies, particularly against the United States.” New York-based Citigroup Inc. operates the economic surprise indexes, which measure data surprises against market expectations. A positive reading means numbers have come in ahead of expectations, while a negative one means they have missed expectations.
Canada on Tuesday was at minus 88.2, a big drop from a positive reading of around 100 at the end of last year. The U.S., where labour and retail data have recently come in better than expected, was at 43.7, making for the biggest gap on the index between the two neighbours in four years.
National Bank’s economists aren’t surprised by Canada’s poor showing.
“Economic data in Canada has stumbled out the gate so far in 2026,” they said, citing year-to-date jobs losses and several employment misses compared with analyst expectations.
For example, the country has shed more than 110,000 positions since the start of the year. Economists forecasted the economy would add 10,000 jobs in May, but it lost almost 18,000.
The biggest miss of the year, however, came in March, when the economy lost 84,000 positions versus forecasts of it adding 10,000.
But Canada’s recent poor showing on Citi’s index isn’t its worst. That came in late 2022, when its score fell to its lowest level of nearly minus 150 because the economists said the Bank of Canada “was bludgeoning the economy with rate hikes” due to rising inflation, partly spurred by an energy supply shock after Russia declared war on Ukraine.
Canada’s economic numbers were worse in the latter part of 2022, but the economy had been spitting out positive inflation surprises and momentum was building prior to the Bank of Canada rate hike campaign, they said.
The economic echoes of today — an oil supply crisis and inflation worries — are similar, but Schleich and Currie wonder whether geopolitics or bad economic surprises hold more sway on the outlook for interest rates.
There have been times when geopolitical events have pushed economic data to the sidelines in terms of the interest rate path, they said. For example, Canada produced some stronger-than-expected numbers in early 2025, but markets focused on the threat posed by U.S. tariffs.
The Bank of Canada continued to cut interest rates throughout 2025, taking them to 2.25 per cent from 3.25 per cent at the start of the year as it tried to diminish the effect of Donald Trump’s tariff war.
Geopolitics also took centre stage in the early days of the oil crisis, the pair said. But they said the poor economic surprises Canada is producing these days will probably hold more sway over what happens with interest rates.
As evidence, they pointed to yields on five-year Government of Canada bonds, which are falling relative to U.S. Treasury yields, and is consistent with weak/disappointing economic data in Canada.
They also expect more “sluggishness” ahead for the economy, especially given the Canada-U.S.-Mexico Agreement negotiations loom large as a threat.
“When it comes to the economic and inflation environment in 2026, this time is different, allowing the Bank of Canada to take a more patient policy approach,” they said.

05/20/2026

Inflation data gives Bank of Canada more flexibility to hold interest rates, economists say.

Weakness in core inflation measures amid spiking oil prices points to the Bank of Canada having more flexibility to hold interest rates steady, economists say.

The consumer price index (CPI) accelerated to 2.8 per cent last month, according to Statistics Canada on Tuesday, but headline inflation was lower than economists’ consensus of 3.1 per cent and below the three per cent forecast by the central bank in its April monetary policy report.

Core price pressures ‘nowhere to be seen’: Capital Economics

Capital Economics Ltd. chief North America economist Stephen Brown said the “downside surprise” on headline inflation was partly because food prices came in weaker than expected.

Overall food prices in the United States jumped 0.5 per cent between March and April to 3.2 per cent on an annualized basis, according to CPI data released last week. But food inflation in Canada slowed to 3.5 per cent in April from four per cent in March.

However, Brown said the surprise was mainly because the potential indirect effects of higher fuel costs aren’t putting pressure on core inflation. Excluding food and energy, CPI slowed to 1.5 per cent in April, the lowest level since March 2021.

He said the “even better news” for the Bank of Canada is that the average annual rate for its preferred measures, CPI-trim and CPI-median, is also at a five-year low of 2.1 per cent.

02/03/2026

Canada builds at near-record pace, but one province remains a drag: TD
Rental construction and federal support are driving the gains, for now at least. Residential home construction is moving at a brisk pace across Canada by historical standards but the results are uneven, with Ontario emerging as the clear laggard, according to a TD Economics report.
“On a historical basis, Canadian homebuilding is indeed running strong,” said Rishi Sondhi, an economist at TD Economics. Canada is building homes at an annualized pace of roughly 264,000 units, a level exceeded only a handful of times since the postwar era.
However, one province remains a drag. Housing starts are at or above long-run averages in every region except Ontario. While the province has seen some recovery from subdued levels reported early in 2025, starts are still trending around levels seen between 2015 and 2019, before ultra-low interest rates sparked a surge in pandemic-era housing activity and the 2022 to 2024 population boom, Sondhi says.
In Ontario itself, the Greater Toronto Area highlights the weakness in housing activity. Condo construction is “trudging rock-bottom depths, with starts trending near their lowest level since the Global Financial Crisis,” he says.
Condo pre-sale activity has also struggled amid investor pullback. Rising interest rates have made units more difficult to purchase and, for investors who pre-qualified at lower rates, more difficult to close on. Falling condo prices have further reduced the appeal of these units.
While purpose-built rental construction has ramped up, construction of other types of ownership housing remains “muted,” Sondhi says. Shortages are more often found in “ground-oriented” homes, such as detached houses, semi-detached units and townhouses, which have been underbuilt for decades.
In contrast, housing starts are running well above long-term norms in Alberta, driven by strong population growth and job gains, and in Atlantic Canada, where building is heavily concentrated in rental housing. Quebec’s market has also been propped up by rental construction, while condo building in British Columbia has proven more resilient than expected.
Beyond strong demand for purpose-built rental units, housing starts have also been supported by cuts to the GST/HST paid by builders, and by federal financing programs.
Despite the strong pace of construction, Sondhi says Canada has not yet eliminated the housing shortage created during the population surge between 2022 and 2024. He estimates the national shortfall is about 400,000 units, though he notes that shortages vary by housing type.
Starts expected to cool as population growth slows.
Housing starts are expected to slow as population growth cools, reducing demand for new housing, particularly in the rental market. The development of new households is also expected to slow to a crawl this year and remain low through 2027.
As a result, Sondhi says the gap between housing demand and new housing supply could close in 2027, marking a reversal from conditions seen during Canada’s population boom.
However, he cautions that closing the supply gap would not be enough to solve the housing affordability crisis.
“An important point here is that while housing completions are likely to make up for their prior shortfall, they will probably need to be amped up even further on a sustained basis, if affordability were to be restored to its pre-pandemic level,” Sondhi said.
Interest rates are expected to be largely neutral for the outlook, as TD assumes bond yields will hold steady and the Bank of Canada will leave its policy rate unchanged.

02/02/2026

Canada’s housing market has always moved in cycles — spring listings, summer slowdown, fall reset and winter hibernation. But many realtors say that rhythm has been disrupted. Instead of a routine seasonal lull, what they’re seeing now is a prolonged chill driven less by weather than by psychology, affordability strain and economic uncertainty.

In the Greater Toronto Area (GTA), headline data reflect that slowdown. For the calendar year 2025, Toronto Regional Real Estate Board (TRREB) reported 62,433 home sales — down about 11.2 per cent from 2024 — while the annual average selling price dipped to $1,067,968, a 4.7 per cent decline from the prior year.

In December 2025, the MLS Home Price Index composite benchmark was down 6.3 per cent year-over-year, and the average selling price was about $1,006,735, roughly 5.1 per cent lower than December 2024 — underscoring how broadly prices have adjusted across property types.

What stands out beyond pricing is how muted the usual seasonal swings have been. TRREB’s seasonally adjusted data show GTA home sales in November 2025 were essentially flat compared with October, dipping just 0.6 per cent month-over-month — rather than showing the kind of rebound often seen at that time of year.
Nationally, CREA reported home sales fell about 2.7 per cent from November to December, with activity 4.5 per cent below December 2024, suggesting the market’s traditional seasonal rhythm is subdued rather than sharply cyclical.

Condo apartments in particular have shown notable weakness. In December 2025, the average GTA condo price was around $628,029, down about 7.2–7.9 per cent year-over-year, TRREB reported — an indication that even the more affordable segment is not immune to the slowdown.

In Toronto’s condo market, realtor Alexander Yolevski, who works largely in Midtown Toronto, says the traditional calendar matters far less than it once did. “The seasonality of the market has become almost irrelevant,” he said, arguing that interest rates, global events and job security fears now exert more influence than the time of year.
Conditions clearly favour buyers, but that hasn’t translated into a rush of activity. Instead, it has reduced urgency. “This is a buyers’ market… buyers can be picky like they have not been able to be in a very, very long time,” Yolevski said.

That patience on the demand side is colliding with growing fatigue among sellers. Sales are happening, Yolevski said, but largely because owners are adjusting expectations — not because demand is surging. “The fact that sellers are slowly starting to grasp the value of what they are trying to sell is what is making sales happen at all at this point,” he said.

The strain is particularly visible in the pre-construction and assignment segment. Yolevski described the assignment market as “a very sad and ugly place right now,” pointing to defaults, legal disputes and steep losses for some would-be sellers.

National data reinforce the sense of caution. According to the Canadian Real Estate Association (CREA), there were about 133,495 properties listed for sale on Canadian MLS Systems at the end of December 2025 — up roughly 7.4 per cent from a year earlier — and inventory stood at about 4.5 months, near long-term balanced levels.

CREA’s MLS Home Price Index showed the national average selling price at about $673,335 in December 2025, essentially flat year-over-year (-0.1 per cent), as some regions saw declines and others modest gains.

Not all regions are feeling the same chill. TD Economics points to several markets that continued to post price gains in 2025, including Saskatchewan, where average home prices rose nine per cent, and Newfoundland and Labrador, which recorded near double-digit growth for a second straight year.

Quebec also stood out, particularly Quebec City, where prices jumped roughly 17 per cent in 2025, according to TD, as high consumer confidence and a tight ownership market supported gains even as larger markets cooled.

Further north of Toronto, in Barrie, Ont., Peggy Hill of the Peggy Hill Real Estate Team sees a different but related version of the same freeze. “We haven’t really seen that in about three years … seasonality has kind of gone out the window with so much uncertainty,” she said.
While buyers from the GTA are still moving to Barrie, affordability remains the key driver. Even so, hesitation remains widespread. Hill said last year’s rate cuts did little to change behaviour because broader fears dominate decision-making. “I don’t think there’s ever been a time when there’s been more uncertainty in the world, and it’s affecting people’s psyche.”

Sellers in Barrie are also struggling to align expectations with market realities. Many list at prices tied to past peaks, receive limited showings and pull their properties off the market. Downsizers in particular are pausing when the equity freed up does not justify the costs of moving.

Hill said financial pressure is becoming more visible. Some homeowners renewing mortgages are turning to second mortgages or private lenders as equity cushions shrink — a sign that household balance sheets are tighter than headline prices alone imply. At the same time, renting out a property is less of a fallback than during the pandemic, as softer rents make it harder to cover carrying costs.
Ottawa presents a comparatively steadier picture, though not immune to broader sentiment. Kevin Cosgrove, a realtor in the capital, described the local market as predictable rather than distressed. “This feels less like a market driven by urgency and more one driven by confidence, and that’s generally a healthier place to be,” he said.

Buyers in Ottawa have been cautious but are gradually returning as interest rates and pricing feel more stable. Condo supply remains elevated relative to demand, though Cosgrove noted that return-to-office policies could support demand for centrally located units.

Even there, however, confidence is vulnerable to events beyond housing. Trade tensions, global politics and economic headlines can quickly cool momentum. “Buyer confidence basically controls everything in our market,” he said.

Looking beyond local boards, industry forecasts point to only modest improvement. CREA’s 2026 forecast calls for national home sales to increase to roughly 494,512 transactions — up about 5.1 per cent from 2025 — but notes that uncertainty remains a key restraint on stronger activity.

Across these regions, the common thread is that transactions are still happening, but for different reasons than in boom years. Buyers hold more leverage but feel little urgency. Sellers are adjusting, often reluctantly. Investors are largely on the sidelines. And many households are navigating tighter finances than headline price trends alone suggest.

If spring brings a lift, realtors say it may look less like a sudden thaw and more like a cautious shuffle forward through what looks like housing’s longest winter.

01/27/2026

Low rise is doing is fine. Condominium market is in recession and could be there for another two years. Thirty percent of unit cost are taxes; the only thing Canada taxes more is to***co and alcohol. It is a sin to buy housing - it must be fixed.

CIBC Deputy chief economist Benjamin Tal talks with the Financial Post's Larysa Harapyn about Canada's housing market and economy. Tal says 2026 will be a tr...