July 2026 Market Update: Inflation Drops to 2.8% & 50% US Tariffs Impact

Ciao! Welcome to a new episode of Helping YOU Build Wealth Through Real Estate...Brick by Brick with me, Nico James-Bock, Founder of The CondoWiz™ Group and Broker with Re/Max West Realty in Toronto.

In this episode, we break down the latest mid-2026 real estate momentum, key central bank announcements, and major macroeconomic trade updates impacting real estate investors and homeowners across Canada.

Key Takeaways:

• Housing Market Momentum: Canadian MLS® home sales rose 0.5% in June, building on May’s 5.5% jump and confirming the market is finding its floor.
• Interest Rates Held: The Bank of Canada kept the overnight rate steady at 2.25% for the sixth consecutive meeting.
• Inflation Cooled: Headline inflation eased to 2.8% in June, driven by lower gasoline costs and moderating core price pressures.
• Single-Family vs. Condos: Single-family homes lead the market recovery while condo inventory presents strategic value opportunities for long-term investors.
• Macro Risk & US Tariffs: An overview of the proposed 50% US tariffs under Section 338 and what it means for CUSMA and the Canadian economy.

📲 Ready to build your real estate portfolio with confidence?

Book a 1-on-1 strategy call with Nico James-Bock and The CondoWiz™ Group team today!

👉 Visit: Real Estate Strategy Call

👉 Email: TheCondoWiz@gmail.com

Transcript

SPEAKER_00 0:04

Housing market momentum gains ground. Ciao everyone and welcome back. We are seeing some very interesting shifts in the Canadian real estate market as we navigate mid to late 2026. The Canadian Real Estate Association reported that home sales across MLS systems edged up another 0.5% month over month in June. Now, 0.5% might sound modest, but when you combine that with May's massive 5.5% surge and April's 0.9% bump, overall national activity is sitting roughly 7% higher than we were in March. We are officially seeing buyer and seller expectations realign, price declines slowing down, and a market that is effectively finding its floor. The Bank of Canada holds steady. On the monetary policy front, the Bank of Canada announced this past July 15th that it is holding the key overnight lending rate steady at 2.25%. For the sixth consecutive meeting, policymakers noted that Canada's economy is showing steady signs of stabilization, though significant global risks remain, particularly surrounding conflict in the Middle East and evolving US trade dynamics, which we'll get to in a moment. For buyers and homeowners, a predictable policy rate provides a stable benchmark for mortgage planning through the remainder of 2026. Remember, we are halfway there, a little bit past the halfway mark, and we are now at the end of the summer market, and we're preparing for the fall market. Good news on the inflation front. Let's talk inflation. Because June bought a welcome surprise, headline CPI cooled down to 2.8% year over year in June, down from 3.2% in May. In fact, month over month CPI actually fell 4.4%, making the marking the largest drop monthly drop since late 2024. A temporary dip in global oil prices drove a 10.2% monthly drop at the pump. Excluding gasoline, core inflation sits right around the 2.2% mark. While post cities like Toronto saw hotel and travel price bumps due to, predictably, the World Cup excitement. Overall underlying inflationary pressures across the board continue to moderate. Not all property segments are moving at the same speed. The market bottom is far more apparent in single family homes, where end-user demand remains very strong. Conversely, the condo sector, especially investor-heavy units in major urban hubs across Ontario, is still working through excess inventory, higher carrying costs, softer rental markets, and shifts in population growth from reduced temporary residence permits have created headwind opportunities for savvy long-term buyers. Remember, you think long term. As inventory gets absorbed and financing stays predictable, condo activity will steadily recalibrate. It'll take a few months, but it will happen. The 50% tariff threat from the US. Now, let's pivot to the major macro headline hitting the wire. President Donald Trump signed proclamations again imposing a 50% ad valorum tariff on roughly 20 billion dollars of Canadian imports, set to take effect August 19th, just a little bit over uh three weeks from now. Invoking section 338 of the Tariff Act of 1930, a never-before used legal mechanism, the U.S. administration cited Canadian trade policies across alcohol, dairy, and motor vehicles. This represents a significant escalation in cross-border trade friction that every real estate investor needs to keep on their radar. Sector impacts, as those that I mentioned, and Kuzma friction. While critical energy and mineral exports are exempted, this 50% duty impacts key sectors like building materials, including cement and plywood, as well as consumer goods and machinery. Prime Minister Mark Carney noted that Canada has stood its ground while presenting proposals to modernize Kuzma during its rolling review. With a 30-day window before these tariffs take effect, many market analysts view this move as an aggressive negotiating tactic ahead of the trade discussions rather than a permanent state. So there is movement, uh, but we'll have to see how this all plays out. Global volatility and economic outlook. Between Middle East geopolitical tensions affecting energy prices and emerging productivity gains driven by AI adoption, global markets remain quite complex. The Bank of Canada predicts GDP growth of 0.7% for 2026 before accelerating to 1.8% in 2027 and 2028. Financial conditions in Canada have eased since the spring of 2026, providing a solid cushion for domestic borrowers even amidst international uncertainty. What is the bottom line for your wealth building strategy? Accumulated pent-up demand over the last two years is meeting improved affordability across all regions. Single family homes are leading the charge, while the condo segment segment offers strategic entry points for value investors with a long-term lens. Don't overlook this opportunity. Yes, there are a lot of condos on the market, but this is to your advantage. Softening prices in this sector can bode well for your long-term strategy. Don't let headline noise distract you from structural market realities. Brick by brick, staying informed is how you win. Thanks for tuning in. Like, share, and please leave a comment. How are these shifting winds affecting your uh strategy heading out of the summer and into the fall? Reach out to the conduit group at Remax West Realty Inc. today. I'm Nico James Bach. Let's map out your next move. Ciao ciao.