October 7th, 2025 Mortgage Industry Update
The Bank of Canada announced on September 17th that its overnight rate will lower to 2.50% from 2.75%. Marks first rate cut since March. The cut is mainly due to declining GDP and rising unemployment rates nationally. The Bank continues to monitor the tariff situation with the US. The prime rate is now 4.70%.
Additionally this week:
– Statistics Canada: Nation’s population growth, once driven by record immigration, slowed to just 0.1% from April to July 2025. This is the slowest second-quarter growth since 1946, outside of the pandemic, and much lower than the 0.7% and 0.8% increases seen in 2023 and 2024.
– GTA’s distressed listings are surging. August saw 149 new Power of Sale listings—up 30% annually, and more than six times higher than 2022. Power of Sale listings made up 1.1% of new listings in August 2025, growing 22% faster than total inventory year-over-year.
– On average, August usually saw 1,595 new home sales in the GTA over the past decade. However, according to Altus Group, there were only 300 new home sales in the GTA in August. This is a 42% drop from the same month last year and 81% below the 10-year average.
– Most Canadians in professional, finance, and knowledge jobs aren’t eager to give up remote work. Just 9% would choose to work in the office full-time, while 59% said they’d rather work mostly from home, according to an Angus Reid survey.
– Canada’s youth unemployment rate hovered at 14.5% in August 2025, slightly lower than July’s level but still near the highest seen outside the pandemic since 2010.
– Statistics Canada: People receiving regular employment insurance benefits rose 1.2% in July from a month earlier. Has reached the highest level since February 2022. Since start of this year, the cohort has grown by 64,000 or 13.2%.
– Zumper: Canada’s rental market cooled again in August. Marked eleventh straight month of falling rents. Toronto’s one-bedroom rents fell 12% yearly, the largest drop among all Canadian cities. Two-bedroom rents in the city also declined by 12.5% annually, now averaging $2,800.
– A new National Payroll Institute survey conducted among 2,320 working Canadians, showed that financially stressed workers dropped to 36% in 2025 from 41% in 2024. Meanwhile, 30% of workers now feel financially comfortable, up from 28% last year.
– CMHC: Ontario has achieved just 26% of its annual housing target so far in 2025, as new data released two-thirds of the way through the year suggests hitting its goal may be impossible. Just 5,149 new homes started construction in August, a drop of 4% compared to the year before.
– Statistics Canada: Inflation rose 1.9% from a year ago in August, up from July’s 1.7% increase. Acceleration — which was slightly weaker than median projection in Bloomberg survey of economists — was mainly driven by gasoline prices that declined to a smaller extent last month.
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.
