Rennie Landscape Fall 2025

Economy

Canada’s labour market has softened materially. The national unemployment rate rose from a 4.8% low in July 2022 to 7.1% in August 2025 (Rennie Landscape — Economy). Youth joblessness also deteriorated, with 15–24 unemployment reaching 14.6% in July 2025 before easing to 14.5% in August. Combined with slower employment growth, these conditions point to weaker near‑term housing demand and reinforce the case for lower policy rates.

Cross‑border travel patterns shifted as trade tensions escalated. Through the first seven months of 2025, Canadians cut trips to the U.S. by 27%, while trips to other countries rose 7%, for a net reduction of roughly 4.5 million outbound trips (Rennie Landscape — Economy). Fewer foreign trips and slightly fewer international visitors domestically suggest more spending at home, helping retail sales hold up even as the job market cools.

Quarterly GDP data have been choppy. Inventory front‑running tied to U.S. tariffs boosted exports in Q1 and lifted quarterly growth to 0.5%, followed by a Q2 pullback as exports fell 7.5% (Rennie Landscape — Economy). With job losses in midsummer, a second straight negative quarter is plausible, which would qualify as a recession. For real estate, the signal is straightforward: softer growth typically tempers price pressures and nudges rates down.

Rates

Headline inflation has stayed within the Bank of Canada’s 1–3% target band for 20 consecutive months through August, and has been under 2% since April (Rennie Landscape — Rates). The Bank moved its policy rate into the mid‑range of the estimated neutral corridor (2.25–3.25%) at 2.75% in March, and on September 17 lowered it to 2.50% as growth cooled (Rennie Landscape — Rates). Long‑term yields remain sticky as markets price higher inflation expectations linked to global tariffs and U.S. fiscal deficits, implying a steeper curve even as the overnight rate edges down.

Credit & Debt

Debt service remains elevated but off the peak. Canada’s total debt service ratio hit a record 15.11% in Q4 2023, eased to 14.37% in Q1 2025 and ticked to 14.41% in Q2 2025 (Rennie Landscape — Credit & Debt). Mortgage arrears climbed from a 0.14% trough in Q3 2022 to 0.23% as of Q2 2025, a level that still matches pre‑pandemic lows (Rennie Landscape — Credit & Debt).

New credit creation is recovering alongside lower rates. Canadians took on $62.1 billion in new debt in the first half of 2025, 22% higher than the first half of 2024. Mortgages drove the increase, accounting for 82% of all credit extended, while consumer credit fell 22% to $9.1 billion and non‑mortgage debt fell 65% to $1.8 billion (Rennie Landscape — Credit & Debt). Concentration in mortgages helps household balance sheets because mortgage rates are typically lower than unsecured borrowing, and borrowers prioritize staying current.

Demographics

Immigration settings point to slower population growth in the near term. Ottawa is targeting a reduction in the non‑permanent resident share of the population from 7.4% to 5% by end‑2026, and has trimmed permanent resident targets to 395,000 in 2025, 380,000 in 2026 and 365,000 in 2027 (Rennie Landscape — Demographics). Because 89% of NPR households rent versus roughly one‑third for Canadian‑born or immigrant households, the pullback will primarily moderate rental demand growth (Rennie Landscape — Demographics).

Within Metro Vancouver, BC Stats now projects slower growth for the City of Vancouver and continued expansion in Surrey, which is expected to surpass Vancouver’s population by 2027 (Rennie Landscape — Demographics). Planning for tenure mix and transit‑linked supply will matter more as household formation adjusts.

Housing

Affordability has improved from its April 2024 nadir as both prices and rates retreated. By August 2025, the region’s benchmark price sat below August 2022 levels, and the combination of lower variable rates and softer prices has lifted purchasing power to a three‑year high (Rennie Landscape — Housing). This change won’t unlock every buyer segment, but it reduces monthly carrying costs and widens qualification for many end‑users.

Developers are leaning into rental. CMHC data show more than 34,000 purpose‑built rental homes under construction province‑wide—the most since 1990 publication began (Rennie Landscape — Housing). In Metro Vancouver, over 18,000 market rental apartments were under construction at the end of Q2 2025, with a further pipeline exceeding 75,000 homes at various planning stages across municipalities (Rennie Landscape — Housing). Not all projects will proceed, but a large share are “blue‑chip” applications from known developers and institutions, which improves completion odds over the next cycle.

Policy

The federal government announced a proposed GST rebate for first‑time buyers of new principal‑residence homes purchased on or after May 27, 2025: up to $50,000, with a full GST rebate at or below $1,000,000 and a linear phase‑out to $0 at $1,500,000 (Rennie Landscape — Policy). As Rennie notes, this would meaningfully aid one buyer segment; indexing any cap would preserve its value over time.

Financing terms for rental are shifting. CMHC’s MLI Select insured more than 179,000 rental homes in 2024, but changes effective July 14, 2025 add higher premiums and new surcharges of 0.25% for amortizations beyond 25 years, plus another 0.25% if the effective gross income test is unmet at funding (Rennie Landscape — Policy). The province also amended fee timing: starting January 1, 2026, only 25% of development cost charges (DCCs) and amenity cost charges (ACCs) are due at building‑permit issuance, with the remaining 75% at occupancy or four years after permit issuance, whichever comes first (Rennie Landscape — Policy). Lower upfront outlays should help viable projects move ahead.

Why it matters

• Softening growth and a weaker labour market increase the odds of additional near‑term rate cuts, which support purchasing power (Rennie Landscape — Economy).
• Debt service is high but trending down, while arrears remain low by historical standards—conditions that limit systemic risk to housing (Rennie Landscape — Credit & Debt).
• Immigration adjustments will moderate rental demand growth, aligning with a sizable rental delivery pipeline through the decade (Rennie Landscape — Demographics).
• Fee‑timing relief and targeted buyer incentives can accelerate starts at the margin, though higher insured‑loan premiums will weigh on some rental pro formas (Rennie Landscape — Policy).

For the complete interactive analysis, see theRennie Landscape Fall 2025 report.

This article is for informational purposes only. Statistics and market conditions are current as of the publication date and may change without notice. It is not legal or financial advice. Always verify details and consult qualified professionals before making real-estate decisions.