If you are considering purchasing your first property, this has been the best time to do so in at least three years.
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, July 16th, 2025
The inventory dip we have come to expect for the summer months has failed to materialize early on this summer, as new listings continue to outpace sales. Yet, buyer activity remains very selective. Open houses are either very busy or completely dead. What determines this is the product type, with one bedroom condos being the least desirable and most plentiful, and the price. Buyers will show up for a desirable product that is priced reasonably. If you are considering purchasing your first property, this has been the best time to do so in at least three years. While most in this category are waiting for further declines, keep in mind that listing prices are not always firm. I’ve watched some very reasonably priced units sell for 10-15% below original list prices. Naturally, everyone wants to get the best price and “catch” the bottom of the market. Few will ever do so. It will not be apparent that the bottom has been reached, and once it is, prices will almost immediately revert higher again. Wouldn’t you rather be buying without competition, when sellers sometimes have no choice but to sell?
Interest rates are still much higher than they were a few years ago, and the hopes that they may be falling any further are quickly evaporating. Employment and inflation data released in both Canada and the US this week are not giving central banks any confidence that rate cuts are needed to stoke the economy or inflation amid trade wars instigated by the Trump Administration. If anything, shifting investments and changing spending habits are boosting the economy and driving up inflation. I continue to monitor the situation involving the Fed Chair, being threatened daily with removal unless rates are cut substantially. As unlikely as it seems (he’s a good punching bag as-is), what would happen if he was removed and the successor dropped interest rates precipitously? Bond yields might actually go up, not down, implying future inflation. If the Canadian Central Bank followed suit (to stabilize the Loonie, perhaps) fixed rate mortgages would still follow the bond market (higher) and variable rates might get cheaper, but for how long? In short, this is not a scenario to wait for with great anticipation.
Bond yields keep creeping higher, with the Canadian 5yr yield hitting 3.15% (this is what 5yr mortgage rates are based off) and the US 10yr approaching 4.5%. All eyes are on impacts of the tariffs on producer inputs and retail prices. Should they continue to filter through and negotiated tariff rates continue to be higher than anticipated, bond yields are likely to continue higher.
New all-time highs for US and Canadian stocks are swelling the investment portfolios of those who have them. Those who do not are going to be feeling the effects of inflation far more, without the cushion of rising asset prices. Tech stocks are now joining in on the rally, including Nvidia which has now become the world’s first $4 Trillion dollar company.
Bitcoin has hit a new all-time high of $123,000 and pulled back from that mark slightly. The wave of corporate treasury acquisitions (now more than just Strategy Inc.) and the constant inflows into bitcoin ETFs are overwhelming the profit-taking of early adopters. Gold has not yet surpassed its April high of nearly $3500. Unlike bitcoin, with increased prices, gold producers create more supply, possibly limiting upside potential. Copper prices are also surging due to the weaking US Dollar, declining ore grades at major mines, delays in permitting for new mines, and insatiable demand from producers of batteries and data centres. Oil has settled back into a familiar price range in the mid-$60 range, while gas prices are not presently adding to the inflation picture.
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.