Despite the Bank of Canada’s September rate cut, housing activity continues to cool, reminding Canadians that real estate moves more on confidence than on central bank cues.
The BoC’s modest 25-basis-point rate cut in September barely moved the needle. National home sales fell 1.7% month-over-month, with the country’s most expensive markets — Ontario and B.C. — showing the sharpest slowdowns. Affordability remains the wall most buyers can’t scale, even as prices dip and mortgage rates ease.
“It’s not one big housing market,” says National Bank economist Daren King. “The pandemic was an anomaly — everyone was buying at once. Now, we’re back to dozens of micro-markets shaped by local jobs, confidence, and affordability.”
🏠 Variable Rates Lost Their Charm
Once the favourite of savvy borrowers, variable-rate mortgages have lost their shine. After being “burned” during the rapid rate hikes of 2022–2024, many homeowners are sticking to fixed terms. As mortgage broker Leah Zlatkin explains, another quarter-point cut barely registers for most Canadians.
“For every $100,000 borrowed, a rate cut like this saves you around $13–$15 a month. For the average Ontario mortgage, that’s the price of a drive-thru coffee run,” Zlatkin notes. “It’s not enough to reignite demand — especially when job security is shaky.”
📉 Confidence, Not Rates, Is the Real Currency
Even with the Bank of Canada’s next move looming, consumer psychology and employment fears are running the show. Rising layoffs and record youth unemployment have made even white-collar Canadians nervous — a rare shift in sentiment that’s freezing decision-making.
Zlatkin admits, “I’ve never had so many clients — professionals, executives, even government workers — express anxiety about job stability. That’s new territory.”
🌎 Trade Turbulence & Regional Realities
Compounding the uncertainty is Canada’s trade tension with the U.S., which continues to weigh on economic outlooks. “If a favourable agreement lands, Toronto and Vancouver could rebound fast,” says King. “But when homes are already unaffordable, even small economic shocks get amplified.”
Meanwhile, regional resilience tells a different story. Atlantic Canada — particularly Halifax — is quietly steady thanks to stable employment in universities, naval operations, and tourism. Yet even there, psychology trumps fundamentals.
“People are used to homes flying off the market. When they don’t, it makes them question why,” says Chris Perkins of Coldwell Banker Maritime Realty. “Higher inventory should be good for buyers, but instead it’s making them hesitate.”
💡 Lendworth Takeaway: A Market Reset, Not a Rebound
The takeaway for investors and homeowners alike? The era of easy money and synchronized housing booms is over. Canada’s real estate is now hyper-local, driven by jobs, affordability, and confidence — not central bank announcements.
At Lendworth, we continue to see opportunity in select, well-secured markets where fundamentals still make sense. Conservative lending, stable yields, and disciplined valuations remain key — because in 2025, stability is the new growth.
Lendworth Mortgage Investment Corporation
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📍 Vaughan, Ontario | www.lendworth.ca