This week, hopes for further interest rate cuts were put on pause, as a tough market creates new challenges in the Toronto condo market for condo owners and highlights the growing importance of family help in buying a home.
Rate Cut Hopes on Hold
Even with a surprisingly strong Canadian jobs report in June, economists now believe that escalating US trade tensions will likely force the Bank of Canada to keep interest rates on hold. The big banks are now split on what comes next, with RBC even forecasting no more cuts at all this year. For anyone with a variable-rate mortgage or waiting for borrowing costs to drop further, you’re not likely to see more relief in the short term.
Toronto’s “Stuck” Condo Market
A new report this week highlights a major challenge for local homeowners: the Toronto condo market has gone soft, leaving many owners “stuck.” A flood of new condo supply and falling investor demand have caused sales to drop, erasing the equity that many owners were counting on to move up to a larger home. If you’re a condo owner planning to upsize, you may face a tough choice: sell for less than you hoped or stay put and wait it out.
The Bank of Mom & Dad Gets Formal
With affordability so stretched, help from family is now a crucial piece of the homebuying puzzle. A recent survey showed that 41% of all first-time homebuyers last year used a financial gift to help with their purchase. This trend is now so common that lenders are creating specific programs for it. HomeEquity Bank, for example, just launched a platform to make it easier for parents to use a reverse mortgage to gift a down payment to their children.
My Take
This week’s news shows a market full of contradictions. While rate cuts are on pause due to big-picture economic risks, the real challenge for many of my clients is right here in Toronto. The “stuck” condo owner is a perfect example of why having a clear financial strategy is more important than just chasing rates. Understanding exactly what you can afford and how to best use your resources—including potential family help—is the key to navigating this complex environment.
Wondering how the stalled condo market affects your plan to upsize? Let’s create a strategy.
Sources:
“Stronger jobs data likely to delay BoC rate cut,” Canadian Mortgage Trends, July 11, 2025
“Mortgage Digest: RBC expects no further BoC rate cuts,” Canadian Mortgage Trends, July 9, 2025
“‘Kind of stuck’: Weak condo market means tough choices for potential move-up buyers,” The Canadian Press, July 10, 2025
“HomeEquity Bank launches custom solutions to help parents gift down payments,” Canadian Mortgage Trends, July 8, 2025