July 2nd, 2025 Mortgage Industry Update
The Bank of Canada announced on June 4th that its overnight rate will hold at 2.75%. Marks second pause after 7 consecutive rate cuts. The major shift in direction of US trade policy and the unpredictability of tariffs have increased uncertainty and diminished prospects for economic growth. The prime rate remains 4.95%.
Additionally this week:
– Statistics Canada: National annual inflation rate was unchanged in May, holding steady at 1.7% – but analysts expect the Bank of Canada will need more conclusive signs of a sustained slowdown before further cutting interest rates.
– Royal LePage’s 2025 Canadian renters report: 54 per cent of those currently renting their homes this year plan to purchase a property in five years or less, with one-third of those respondents saying they plan to do so within the next two years.
– CMHC: Home construction will need to double within next 10 yrs if affordability levels are to reach what was last seen in 2019. Up to 4.8M new homes will need to be built by 2035, with its latest supply gaps estimate report showing between 430-480k housing units are needed yearly.
– CMHC: From 2022 until Q1 2025, condominium sales fell 75% in Toronto and 37% in Vancouver. In Toronto, condo sales are down 21.7% year-over-year and inventory stands at more than 20,000 units.
– Royal LePage’s 2025 Canadian renters report: 37% of renters in Canada spend between 31-50% of their net income on monthly rent costs. 15% of respondents were spending more than half of their income on rent, while 37% were spending 30% or less.
– Statistics Canada: Population growth came to near halt in Q1 2025 as stricter immigration rules took effect. Added just 20,107 people, marking essentially zero quarterly growth. Stands in sharp contrast to 0.3% average seen over past decade and represents slowest rate since 1946.
– Healthcare of Ontario Pension Plan: 71% of homeowners had set aside money for retirement at some point, compared to only 36% of non-homeowners, the majority of whom reported having never done so. 62% said they viewed homeownership as a “key part” of their retirement strategy.
Stay tuned for the next update!
For any questions and concerns please do not hesitate to call Harpreet Singh The Mortgage King at (416) 795-1919.
