From Correction to Confidence: What’s Really Driving the Fall 2025 Market?

After one of the sharpest corrections in Canadian housing history, signs of life are returning to the market — but this recovery looks different.
 In this episode, Nico James-Bock breaks down what’s really driving the Fall 2025 market shift, from falling interest rates and renewed buyer confidence to new financing tools changing how Canadians access home equity.

Whether you’re a buyer, seller, investor, or simply following the economic pulse, this episode helps you understand where we are now, and what’s next for Canadian real estate.

Ciao! Welcome to a new episode of Building Wealth Through Real Estate...Brick by Brick with me, Nico James-Bock, Founder of The CondoWiz™ Group and Broker at Keller Williams Co-Elevation Realty in Toronto.  

💡 In This Episode You’ll Learn:

✅ Why the GTA and Golden Horseshoe are still under pressure despite stronger national sales
✅ How the Bank of Canada’s rate cuts are reshaping affordability and confidence
✅ Why 2025 may be the “rebuilding year” and what that means for housing demand in 2026
✅ What new financing models like Home Equity Sharing Agreements (HESA) mean for homeowners
✅ How regional markets — from the Prairies to Atlantic Canada — are performing differently
✅ What buyers and sellers should really focus on as inventory levels remain high

📈 Key Takeaways:

• The market correction is lasting longer than expected, but optimism is building.
• Falling rates and softer inflation are laying the groundwork for a confidence rebound.
• Smart positioning and not speculation will separate winners from watchers in 2025.

🎧 Listen, Watch, and Engage

👉 Watch the full episode on YouTube or listen wherever you get your podcasts.
 💬 Drop a comment with your thoughts on where you think the market is heading.
 👍 Like, subscribe, and share this episode with anyone who wants to build wealth through real estate… brick by brick.

Ciao ciao

Transcript

Canada’s housing market has started to show flickers of resilience, but we’re still navigating what could be the largest correction in Canadian history. Home sales have climbed for five straight months since April’s low, yet prices remain relatively soft. The GTA and Golden Horseshoe continue to face the toughest conditions due to lack of affordability, condo oversupply, and layoffs in manufacturing, while regions like the Prairies, Quebec, and Atlantic Canada are showing more balance and modest price growth.

Welcome back to Helping You Build Wealth Through Real Estate… Brick by Brick.
I’m Nico James-Bock, and my goal is to help you make sense of today’s market so you can build smarter wealth through property. Coming up, I’ll break down the September 2025 TRREB stats and explain how these shifts affect your strategy moving forward — and where the real opportunities lie.

Let’s start with the GTA snapshot. Toronto saw a brief pause in August, followed by an 8.5% increase in sales month-over-month in September. Prices remain below 2024 levels, and the sales-to-new-listings ratio sits below 40%, confirming a clear buyer’s market. Condos have been the weakest segment, with prices down about 7% year-over-year, while detached homes have also softened. Still, high-quality listings — such as corner semis in Nobleton or unique loft-style condos — continue to attract strong interest. Meanwhile, rising inventory and longer days on market suggest that sellers are becoming more realistic about pricing, pointing to an ongoing adjustment phase.

Looking at the data over the summer months — July, August, and September — the trend has held steady. These months usually show the least variation in sales, and this year’s numbers confirm that pattern. Across most property types, except 905-area townhomes, we’re seeing elevated supply and extended days on market. More sellers are adjusting pricing strategies as buyers gradually return, though urgency remains low. Activity might pick up slightly ahead of Thanksgiving before the usual holiday slowdown.

The reality is that this correction could take years to fully play out. With record completions coming in 2025, buyer fatigue, and the uncertainty around tariffs, the market remains cautious. Still, these conditions create opportunities — buyers can negotiate better deals, and motivated sellers can still make successful moves.

One of the biggest factors influencing housing prices is the cost of ownership. Uninsured mortgage rates have eased slightly, with the three-year fixed averaging around 3.94% and the five-year variable sitting just under 4%. The Bank of Canada cut its policy rate to 2.5% on September 17, following earlier cuts to 3.00% in January and 2.75% in March. Two more cuts are expected before year-end, with the next announcements scheduled for October 29 and December 10.

There’s some skepticism about the Bank’s proposal to exclude mortgage interest from the inflation calculation, as higher rates still drive shelter costs. Most analysts expect at least two more cuts to generate real momentum.

The broader economic backdrop shows a mixed picture. GDP contracted by 1.6% in the second quarter — the largest decline since the pandemic. Employment losses totaled more than 100,000 over July and August, pushing the jobless rate to 7.1%. Inflation is cooling, with core inflation near 3% and shelter costs around 2.6%. Exports, business investment, and construction all remain weak, and excess capacity continues to rise. The Bank of Canada now faces the challenge of managing persistent core inflation against the risk of slower growth.

Population and labor dynamics continue to shape the long-term outlook. Canada’s immigration plan projects slightly slower population growth in 2025 and 2026 before rebounding in 2027. A shortage of skilled labor is still limiting construction capacity amid an aging workforce, keeping the structural imbalance between housing supply and demand firmly in place.

We’re also seeing innovation in financing options. One example is the Home Equity Sharing Agreement (HESA) — a new alternative that allows investors to fund homeowners in exchange for a share of future appreciation. There are no monthly payments, no credit impact, and approvals are much simpler than with traditional HELOCs. It’s gaining traction among equity-rich but cash-limited homeowners.

In summary, pent-up demand combined with motivated sellers is gradually pushing the market toward stabilization. Affordability will remain tight despite lower rates, but 2025 looks to be a rebuilding year — and 2026 could mark the start of a slow return to growth. Real estate professionals and consumers alike should focus on data-driven insights rather than reacting to short-term swings.

Overall, we’re seeing measured optimism. There’s progress, but it’s tempered by ongoing uncertainty around trade and tariffs. The fall market is typically one of the busiest times of the year, though this season may be more subdued. Still, innovation, lower rates, and more realistic pricing are laying the groundwork for the next phase of recovery.

If you found this information useful, please like this episode, leave a comment, and share it with anyone who could benefit from a deeper understanding of the Canadian housing market.

I’m Nico James-Bock, broker at Keller Williams Co-Elevation Realty and founder of The CondoWiz™.
 

Thanks for tuning in — and as always, #StayWell

Ciao ciao.