December 2nd, 2025 Mortgage Industry Update
The Bank of Canada announced on October 29th that its overnight rate will lower to 2.25% from 2.50%. This marks the second consecutive rate cut after a brief pause in rates earlier this year. The Bank expects inflationary pressures to ease in the coming months ahead. The prime rate is now 4.45%.
Additionally this week:
– Re/Max Canada: Home sales are expected to increase by 3.4% next year. Home sales fell year-over-year in 32 of 38 markets Re/Max analyzed between Jan. 1 and Oct. 31, 2025. Predicts a further home price decline of -3.7% in 2026.
– BILD: New home sales in the GTA have hit their lowest point in over a decade, marking 13 consecutive months of record-breaking declines. October’s 570 units sold represented a sharp 29% drop from October 2024 and fell 81% below the 10-year average of 3,033 units.
– Canadian corporations reported operating profit of $200B in Q3, marking quarterly growth of 3.8% as financial sectors outpaced industrial segments dealing with tariff pressures and labour disruptions. Financial industries posted a 6% increase to $95.5B in operating profits.
– RBC poll: Canadians are facing unprecedented financial strain, with nearly 6/10 reporting they lack sufficient savings for unexpected expenses. Half of surveyed said they’re spending all their income on essential bills and expenses, 48% can no longer maintain standard of living.
– Royal LePage Winter Recreational Property Report: Home prices in Canada’s popular ski regions rose moderately in the first nine months of 2025. Nationally, the median price of a single-family detached home in resort areas increased 3.8 per cent year over year to $982,000.
– Canadian HELOC debt is rising at an unusually fast pace. Balances climbed 0.7% (+$1.28 billion) in September to $178.92 billion—the highest since March 2020. That’s a 4.2% increase from last year, and the fastest annual growth since December 2012.
– Statistics Canada: Consumer spending slowed in Q3. Grew 0.2% between July and September after rising 0.3% in Q2. However, was the weakest pace in more than a year. September sales fell 0.7%, matching the median estimate in a Bloomberg survey of economists.
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.
