What might act as a catalyst for buyers could come from the federal budget – due to be released in October
The Two Minute Market Update is intended to keep readers apprised of what’s going on in local real estate markets and in the global financial markets that affect real estate via inflation, interest rates, capital flows and public policy. It is best suited for those not able to keep up with all the news every day, but still wanting to be informed.
Two Minute Market Update, August 27th , 2025
The back-half of August has been as-advertised in terms of real estate sales and listings, but I have noticed a marked uptick in visitors to open houses far in advance of next week’s start to the fall selling season. I fully expect the first few days of September to be some of the busiest of the year for new inventory, likely pushing the total number beyond that of the early summer and toward 1500 total listings, a number that hasn’t been seen at any point in the past 20 years. What might that mean for sellers? More competition and needing to find ways to distinguish your property from others – either via price or condition. For buyers, there will be plenty to choose from and possibly the best time to be upsizing or downsizing, as it allows you to control the situation better than in past years – where with very limited inventory buyers have had to make numerous concessions just to “get on with it”.
Mortgage rates are not likely to be the catalyst buyers are hoping for in making properties more affordable. While one rate cut is a consensus for the Bank of Canada sometime in the final quarter of the year, that’s not really going to move the needle for many. It may be the tipping point between making variable rates cheaper than fixed rates for the first time in a few years. In the US, odds are even for 3 consecutive cuts, a possible reaction to political interference in the US Fed’s role and something that is counter-intuitively seeing long-term bond yields in the US increase substantially. Rate cuts imply increased liquidity flowing through to asset markets – and asset markets are front-running this by zooming to new highs.
What might act as a catalyst for buyers could come from the federal budget – due to be released in October, the first budget from the Carney Liberals since the spring election. Targeted adjustments to the stress test, changes to term lengths of mortgages (7 or 10 year terms) or legislation encouraging competition in lending markets could all significantly improve affordability for buyers. Final legislation on the GST exemption for first time buyers of pre-construction may also finally have the intended effect of absorbing the overhang of unsold inventory. Regardless of the actual substance, there will be some hype to the changes and that might be enough, right as the market prepares to pack it in for the winter.
Stock markets are riding a new wave of enthusiasm around the data centre buildout for AI and the enormous deficit financing from governments attempting to support their respective economies. Nvidia will report earnings Wednesday afternoon, and given that it is valued at over 4.5 Trillion, the contents of those earnings will dictate the direction of the overall market. Much hinges on the US treatment of large tech companies’ ties to China and the charging of a toll on exports to that market in particular. If that affects sales figures and forward guidance (or does not), is what market watchers are looking at most closely.
Bitcoin hit a new marginal high over $124,000 before again retreating under the pressure of distribution by long-time holders. Despite the almost insatiable demand from institutions and new investors, when hundreds or thousands of coins are sold at a time, it is hard to absorb that without sending price lower. Ethereum prices have taken up some of the slack by tripling from the spring’s low prices under $1500. Gold is making its sixth (!) attempt at cracking $3500. That’s a lot of pressure building up in anticipation. Oil and gas prices are subdued entering a volatile period as hurricane season has a tendency to disrupt supply in the Gulf of Mexico and forecasts for the winter determine whether current supply levels will be sufficient. For now, it looks likely that energy will remain a drag on inflation. And that’s a good thing.
Matthew Stiles
Did you enjoy the market update? Subscribe here to receive them direct to your inbox. Feel free to message me at matt@stilesre.ca or call 778-227-3507 to discuss how the above may affect your largest asset and how to keep me in your corner when it comes to making real estate decisions.
Disclaimer: The information provided in this column is for general informational purposes only and does not constitute financial, investment, or other professional advice. While I strive to provide accurate and up-to-date information, I make no warranties or representations as to its accuracy, completeness, or reliability. Any actions taken based on this information are at your own risk. Always consult with a qualified financial advisor before making any investment decisions.