Mortgage Minute: Sept 5, 2025
This week, the Canadian economic landscape sent conflicting signals. A surprising and significant loss of jobs has fueled speculation that the Bank of Canada may finally cut interest rates. Yet, at the same time, strong consumer spending suggests underlying resilience.
For anyone trying to buy or refinance a home in Toronto, these headlines can be confusing. Are we heading for a recession or not? Is now a good time to buy, or should you wait?
The answer lies in looking past the national headlines and focusing on the practical realities of our local market. Here is a clear, credible breakdown of what is happening and how it impacts your mortgage strategy.
The Economic Signal: Job Losses vs. Strong Spending
The top story this week was the Statistics Canada report showing the economy shed 65,500 jobs in August, pushing the national unemployment rate to 7.1%. This weak labour market data is a strong indicator that the economy is cooling, adding significant pressure on the Bank of Canada to lower its key interest rate at the next meeting on September 17th.
However, the picture is not that simple. Data from the second quarter showed that final domestic demand—a core measure of economic health—grew by a robust 3.4%. This was driven by a 4.5% surge in consumer spending and a 6.3% jump in housing investment. This underlying strength is why the Bank of Canada may choose to remain cautious.
A Buyer’s Advantage Emerges in the Toronto Condo Market
While the national economic picture is debated, the trend in Toronto’s real estate market is crystal clear: the advantage is shifting to buyers.
This week, Federal Housing Minister Gregor Robertson described the city’s condominium market as being in a “free fall,” attributing it to a long-predicted correction caused by an oversupply of product. The data fully supports this assessment:
- Falling Prices: The Toronto Regional Real Estate Board (TRREB) reported that average home prices fell 5.2% year-over-year in August. The condo market has been hit particularly hard, with prices in the 905 slumping by 10.6%.
- Surging Inventory: The number of properties for sale is up 22% compared to this time last year, giving buyers more choice and leverage.
- Plummeting Demand: According to Altus Group, new condo sales in July were down a staggering 48% from last year and sat 82% below the 10-year average for that month.
The Strategic Takeaway: Your Opportunity in a Complex Market
This is not a market for guesswork; it is a market for credible, practical strategy. The combination of falling asset prices in the condo sector, less competition, and the potential for a future interest rate cut creates a significant window of opportunity.
For professionals, upsizers, and business owners, this is the time to act with intention. The key is to be prepared. In a market with more choice and negotiating power, having your financing fully underwritten and your budget clearly defined before you make an offer is the single greatest advantage you can have.
If you are ready to move from reacting to the headlines to acting with a clear plan, the first step is understanding your real budget. Contact me today for a no-obligation breakdown of your updated buying power in this new market.
Sources:
- Canada unexpectedly sheds 65,500 jobs, unemployment hits 7.1% – CMT News
- Canadians worse off financially than before pandemic_ report | Canadian Mortgage Professional
- Home prices slide again in Toronto as condo slump continues | Canadian Mortgage Professional
- Prices show no signs of stabilizing in Toronto’s condo market meltdown | Canadian Mortgage Professional
- Renters need to make over $78,000 to have affordable rent in Vancouver, Toronto_ CCPA – CMT News
- Toronto home prices keep sliding as buyers see jump in listings – CMT News
- Toronto’s condo market is nosediving, says federal housing minister | Canadian Mortgage Professional
- Why the Bank of Canada may hold off on cutting rates – for now | Canadian Mortgage Professional