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BOC Rate Decision: Impact on Canadian Housing Markets in 2025

Decode the Bank of Canada's upcoming rate decision and its impact on housing markets: Expert insights for buyers, sellers, and investors in September 2025.

September 08, 2025

Dear Valued Subscriber

As summer begins to fade, all eyes turn to September 17, when the Bank of Canada (BoC) will announce its latest interest rate decision. We’re leaning in—deep—to unpack what this means for Canadian housing markets today, steeped in broader economic currents.

This could be the best rate seem in the last 3 years

📌 In Today’s Newsletter:

  • The economic context driving the rate meeting

  • Media and market expectations heading into it

  • Housing market headlines + price trends

  • What moves for borrowers, buyers, and investors

  • A RealEdge bottom line perspective

Setting the Stage: Why Sept. 17 matters

  • The BoC has held the overnight rate at 2.75% since March, following a cumulative 225 basis points in cuts since mid-2024. That’s the longest pause so far this year.Reuters Equals Money

  • But recent signs are shaky. Labour statistics show losses of 106,000 jobs over July-August and an uptick in the unemployment rate to ~7%.Mortgage Rates Canada

    Reuters

  • As a result, financial markets are now pricing 65–70% odds of a 25-bp cut to 2.50% at the September meeting.Reuters

    Perch

🏘️ Housing Market Pulse: What’s happening now

Decorate Beach House GIF by Ben Marriott

In August, GTA home sales slid 1.8% the first drop in five months with the MLS® Home Price Index dipping 0.1% to C$978,100. The annual price decline now stands at –5.2%, even as sales rose 2.3% y/y and listings increased 9.4%.

  • A Reuters expert poll expects home prices to drop ~2% nationally in 2025, led by 4% declines in Toronto and 2% in Vancouver. Stabilization or modest growth is predicted in 2026 if trade tensions ease and further rate cuts materialize.

  • RBC notes housing activity remains slow but is on a “gradual and uneven” path toward recovery, driven by earlier rate cuts, price correction, inventory gains, and easing trade concerns.RBC

What this means for buyers, sellers, investors, and borrowers

Group

RealEdge Insight

Borrowers

A 25-bp cut could trim ~0.20–0.30% off fixed rates. Variable mortgage holders will feel immediate relief. Locking in soon could pay off.

Buyers

Softening prices and elevated listings may open windows especially in core markets like Toronto.

Sellers

In balanced segments, expect high-quality inventory to still command attention but price appropriately, especially if rates drop further.

Investors

Lower rates and weak employment data may boost demand for multi-family rentals in secondary markets with tight supply and affordability advantage.

RealEdge Bottom Line

We’ve arrived at a critical juncture. The data suggest a slow, sustained housing recovery, but one tethered to external pressure points like trade and jobs. The BoC’s move could clarify signals:

  • A rate cut to 2.50% would likely stimulate housing demand, especially for first-time buyers facing affordability constraints.

  • A hold would signal confidence in the economic stabilization, but leave the still-weak job market and soft sales data as unresolved variables.

Actionable plays right now:

  • Buyers & investors should monitor bond yields and buyer sentiment—then strike when inventory peaks and financing is at its most favourable.

  • Sellers should highlight energy-efficiency, low maintenance, and move-in readiness to stand out.

  • Sustained watch on secondary markets with price advantage and tightening fundamentals could yield better stability.

🤝 How Manasseh Homes Can Help You Stay Ahead

At Manasseh Homes, we understand how global and national shifts impact your local real estate decisions. We provide:

  • Custom neighbourhood analysis based on trade and policy exposure

  • Renovation ROI assessments factoring in tariff-inflated construction costs

  • Smart portfolio diversification strategies for risk-managed growth

Whether you’re actively looking or simply planning your next move, we’re here to help you navigate what’s next confidently and strategically.

👉 Book your strategy session today

See you next week