It’s hard to believe that September is already here. I hope everyone had a great summer and is ready to tackle a new season. Despite summer’s slower pace, the past couple of months have been quite eventful on the economic front. So, with kids heading back to school and the fall market set to kick off, I’d like to focus on three forces shaping the season ahead and how I see them unfolding.
Let’s start with some key statistics. TRREB released its August figures this morning, showing sales down about 2% from a year ago, while new listings fell 14% and active listings declined 11%. Supply is tightening faster than demand is slowing, suggesting we could see renewed price growth in the months ahead.
At the same time, the main factors holding households back remain uncertainty surrounding trade with the United States and the accompanying risk of higher inflation and borrowing costs.
Trade and Tariffs
Trade talks with the United States broke down in August, followed by new tariffs and Canadian countermeasures. The situation remains fluid, and I won’t pretend to know how it ends. What I can tell you is how it is showing up here. Today’s 2.25% overnight rate is not what is holding this market back. Neither are fixed mortgage rates around 4%. Uncertainty is. As a company, we have assisted with more leases over the past four years than at any other time in our history, and that uncertainty is a significant reason why.
That said, at the ground level, the couple expecting a baby in September is not watching the trade negotiations. Neither is the family that has outgrown its house, the downsizer whose stairs have become a problem, or the buyer whose lease is up. These people need a home, and they continue to transact every week, regardless of the headlines. Tariffs may shape the mood of the market, but they do not determine whether you need to move.
Interest Rates
On September 2, the Bank of Canada held its key lending rate at 2.25% for the seventh consecutive announcement, pointing to high energy prices and new tariffs as factors that could push inflation higher rather than lower. A day earlier, RBC Economics released its Mid-Year Outlook and put it plainly: rates are as low as they are likely to go this cycle. Fixed mortgage rates, which dipped below 4% in August, have already edged back above that threshold, and roughly 95% of the borrowers we see are choosing fixed terms.
In my opinion, the era of waiting for the next rate cut is over. Buyers now know the cost of money and can plan around it. Sellers know the Bank is not going to close the gap between an asking price and what a buyer can afford to carry. With rates holding steady, price becomes the affordability lever, and that is in the hands of the seller.
The homes that drew crowds at our open houses this past weekend, ranging from $1.4 million to more than $3 million, all had one thing in common: they were priced for today’s market.
Government Intervention in New Homes
Since April, the enhanced HST rebate has removed the full tax on qualifying new homes up to $1 million, with partial relief to $1.5 million, and many municipal governments have committed to cutting development charges by up to half. Single-family new home sales across the GTA have now beaten their ten-year average for four straight months, with July sales 50% above the norm. Builders are keeping low-rise supply flowing, which is holding prices stable.
How I interpret it: when handed certainty, buyers act. That is the clearest evidence this year that the demand is real and buyers are simply waiting for a reason. The condo side has not seen the same lift. Much of the built inventory is compact, investor-oriented product that does not meet the needs of end users, and no rebate changes that. Remember, if you are interested in participating in these rebates, always confirm eligibility before assuming the rebate applies, and remember that the window to purchase closes March 31, 2027.
The Takeaway
Put these three factors together and you have a market where the noise is loud, the cost of money is known, supply is thinning, and buyers are present but disciplined. RBC calls it “between correction and recovery,” and I think that’s accurate.
Two of the three forces have settled into things we can plan around. The third will play out on its own schedule. But none of them decides who actually transacts this fall. Need will drive a buyer’s decision to move. Price and positioning will determine which homes earn their attention. Good advice matters on both sides, and that’s what we’re here to provide.