January 27th, 2026 Mortgage Industry Update
The Bank of Canada announced on December 10th that its overnight rate will remain at 2.25%. The Bank expects final domestic demand will grow in Q4, but with an anticipated decline in net exports. Overall growth is forecast to pick up in 2026, although uncertainty remains high. The prime rate remains 4.45%.
Additionally this week:
– Statistics Canada: The annual rate of inflation ticked higher in Canada in December, rising by 2.4% compared with a year prior thanks mainly to the impact of December 2024’s temporary GST break. December’s headline figure was 0.2% higher than the November reading.
– Royal LePage House Price Survey and Market Forecast: Aggregate price of a home in Canada decreased 1.5% yearly to $807,200 in Q4 2025. On a quarterly basis posted a similar decline of 1.1%. In GTA the price decreased 5.7% yearly to $1,084,300. On quarterly basis declined 2.7%.
– CREA forecasts that 494,512 residential properties will trade hands this year. Downgrade from its prediction last fall of 7.7%. Expects national average home price to rise 2.8% on an annual basis to $698,881, down from its earlier forecast of a 3.2% increase.
– Statistics Canada: Total value of building permits issued in Canada decreased by $1.8 billion (-13.1%) to $12.0 billion. Residential construction intentions fell 12% to $7.5 billion. Non-residential permits decreased 14.9% to $4.5 billion.
– Urbanation: December was the 15th consecutive month that average asking rents moved lower. Fell 2.3% yearly to an average of $2,060, marking a full calendar year of declines as prices reached their lowest level in 30 months. Average asking rents in Canada declined 3.1% in 2025.
– CREA: National home sales in Canada declined by 1.9% yearly in December. Expecting 5.1% increase in sales in 2026. MLS Home Price Index ticked lower on a yearly basis, falling by 4%, and dropped by 0.3% between November and December amid the market’s continuing deep freeze.
– Engel & Völkers’ 2025 Year-End Canadian Luxury Real Estate Market Report: Sales in the $1–1.99 million band fell 15% in Toronto and 9% in Vancouver, even as average prices in those brackets held roughly flat and new listings dropped sharply in Toronto but rose in Vancouver.
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.
