April’s economic update feels like watching a drama unfold in slow motion: suspenseful, layered, and a little confusing. But don’t worry—I’ve got you covered with a bite-sized breakdown of what really matters for your real estate and mortgage decisions.
Based on the latest report by Edge Realty Analytics, I'll deep dive into Canada’s economy, housing, and mortgage market. Here's the TL;DR... with a side of insight and a dash of “what it means for you.”
🏦 1. Bank of Canada: All Quiet... For Now
April came and went with no change to the Bank of Canada’s overnight rate—surprising many who expected a cut.
Why the pause?
Inflation is still sticky in some sectors.
Inflation expectations are creeping up.
And yes, an election’s around the corner… and central banks hate drama.
But don’t lose hope—markets are still betting on rate cuts in June and September. The projected sweet spot? A policy rate of 2.25%, which translates to a prime rate around 4.55%.
Signs of softening:
March inflation was only 2.3%.
April’s could drop to 1.5%, thanks to falling energy prices and that carbon tax rollback.
Still, 42% of items in the CPI basket are rising more than 3%, so there’s work to do.
What’s keeping the Bank nervous? Uncertainty. The word appeared 49 times in their latest Monetary Policy Report—more than during COVID, 9/11, or the financial crisis.
Missed opportunity?
Many experts believe this was the time for an “insurance cut.” With the job market wobbling and tariff risks on the rise, the economic seatbelt should’ve been fastened tighter.
📉 Bottom line: Lower mortgage rates could still be on the summer horizon, especially if the Canadian dollar strengthens and the U.S. stumbles into tariff trouble.
🧱 2. Housing Market: Two Stories, One Plot Twist
This market has a serious identity crisis.
What's tanking:
Homeowner housing starts are at their lowest since the 2008 crisis.
New condo starts are in freefall—Toronto condo sales are down 62% YoY, and a staggering 95% from 2022 highs.
British Columbia and Ontario are experiencing significant construction slowdowns.
What's booming:
Rental starts. We’re talking 90,000 in the last year and 150,000 more in the pipeline.
The Prairies and Quebec are showing resilience with rising Q1 starts.
Future supply shock?
The pullback in condo and detached home builds now could mean tight resale inventory later. Think 2026 or so—when today’s hesitation becomes tomorrow’s listing drought.
Immigration math gets murky: Policy changes may slow official population growth, even to zero. However, real growth might be undercounted due to asylum seekers, long-term visa holders, and incomplete emigration data.
📌 Takeaway: Short-term softness, long-term scarcity. That’s a recipe for price tension down the road.
📉 3. Mortgages: Growth... with a Caution Flag
Here’s the twist—mortgage loan growth is picking up speed, even with everything going on.
Who’s leading the charge?
National Bank, Royal, and BMO are growing fast—thanks in part to recent acquisitions.
Even non-prime lenders are jumping back in.
But the caution signs are flashing:
$600k+ mortgages are becoming more common.
Delinquencies are rising mainly among those with $850k+ balances.
Self-employed borrowers in construction, manufacturing, and transport are now under tighter scrutiny.
Why so cautious with the self-employed? Because bankruptcy laws in Canada let some incorporated borrowers walk away in just 11 months with no payback. That’s spooking lenders.
📊 Takeaway: If you’re self-employed or borrowing big, it’s more important than ever to prep properly. Underwriting standards are tightening.
🏚 4. Consumer Sentiment: Mood Swings and Sales Slides
Feeling a little uncertain about the market? You’re not alone.
Sales are sliding:
March sales dropped 4.8%, adding to February’s fall.
We’re down 20% in just four months—the steepest dip in three years.
Inventory is ballooning:
Listings are up 9% YoY.
The sales-to-new-listings ratio is the weakest since 2008.
Prices fell 1.0% in March—our fourth monthly decline.
Why the gloom?
Consumer confidence is in the basement—especially in Ontario and BC.
People are worried about jobs, the economy… and yes, Trump’s potential return.
Where it hurts most:
Ontario and BC hold half of all Canadian mortgage debt.
Any trouble there becomes a national issue for banks and borrowers alike.
đź’¬ Reality check: Yes, we may see a boost if rates drop and wage growth holds. But for now, affordability remains a brick wall in big metros.
💳 5. Consumer Financial Health: Resilient… For Now
Here’s the bright spot (sort of).
Arrears remain low—less than half the long-term average. Why?
Canadians still have decent jobs.
And they’re sitting on a lot of home equity.
But Ontario is the canary in the coal mine:
Missed payment risk just hit a 10-year high.
Small business delinquencies are starting to climb.
Debt levels rising:
Even as insolvencies fell, the average dollar amount owed is way up. That means fewer people, but bigger problems.
⚠️ Warning lights ahead: If the labor market stumbles, this “stability” could unravel fast.
đź” What to Watch This Spring & Summer
Keep an eye on:
Rate decisions in June and September.
Consumer sentiment, which drives housing activity.
Housing starts, especially for condos and single-family.
Labor market shifts, which impact arrears and defaults.
Real population growth, not just what’s on paper.
Ready to Talk Strategy?
This market is a puzzle—and your piece looks different from everyone else’s. Whether you're buying, selling, or just trying to stay smart with your mortgage, the best decisions are the informed ones.
📞 Let’s talk about your situation and make a plan tailored to today’s strange but opportunity-filled market. Book a free strategy session now.
