BMO Views from the North Canadian Housing: The End of an Era
Jun 19, 2025
Robert Kavcic, a Senior Economist from BMO Economics, delves into the state of the Canadian housing market. He discusses the sharp decline in property values, particularly in major cities like Toronto and Vancouver, and the challenges posed by rising interest rates. Kavcic highlights the diverging regional trends, revealing healthy activity in some areas despite overall struggles. He also addresses the role of non-permanent residents, affordability issues, and the need for housing strategies focused on family needs rather than just unit quantity.
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Market Weakness and Investor Exit
- Canadian housing market activity remains weak due to higher borrowing costs and economic uncertainty.
- Investor demand has collapsed, flooding the market with supply and depressing prices.
End of Housing Exuberance Era
- The Canadian housing market is in a new era with normalized and higher interest rates.
- Millennial homebuyers are aging out, reducing demand and softening market exuberance.
Housing Supply Mismatch
- Proposed massive housing unit targets are unrealistic and not needed due to slowing population growth.
- Affordability issues stem from the wrong type of housing supply, not from lacking numbers.