Has Canada's Housing Market Hit Bottom? Why Mortgage Rates in Canada and the U.S. Are Heading in Opposite Directions

Canada's foreign buyer ban expires January 1, and Ottawa is reportedly looking at Australia's model as a replacement: let foreign buyers purchase new homes, keep them out of existing ones. I spoke with Australian economist Cameron Murray, author of The Great Housing Hijack, about how that has worked in Australia and what Canada should take from it. Australia's housing market looked bulletproof for years. Prices boomed during COVID and rebounded in 2023 while the central bank was still raising rates. That's no longer the case. After four rate hikes this year, national prices are down more than 5% from their March peak and Sydney is down more than 8%. Australia has also overhauled how it taxes property investors, ending key tax breaks on existing homes while keeping them for new builds. Canada has the same tax treatment Australia is moving away from, but it barely comes up in our housing debate. We also discuss whether foreign buyers actually moved Australian prices, whether steering them toward new construction adds supply, and what it says about new housing if projects depend on foreign buyers to get built. Cameron Murray is an Australian economist specializing in housing and property markets. He is the author of The Great Housing Hijack, co-author of Rigged, and runs the Fresh Economic Thinking newsletter and podcast at fresheconomicthinking.com.

In this month's live, we took a closer look at the latest GTA housing market stats and trends, along with our new First-Time Homebuyer Report, exploring where buyers can find homes under $1M in great school districts and how MoveSmartly.com can help make that search easier. We also caught up with Davin and Gus from our team to hear what they're seeing on the ground this fall, what buyers and sellers should keep in mind, and why multiple offers don't always mean paying well over asking. Mortgage expert David Larock joined us to break down the latest U.S. inflation numbers and what they could mean for the Bank of Canada and mortgage rates here at home. Set-up a meeting with John Pasalis and his agents at Move Smartly to discuss your own real estate questions privately: https://www.movesmartly.com/meetjohn Read our full report on the top GTA neighbourhoods for first-time buyers looking for great schools and homes under $1M: https://insights.movesmartly.com/first-time-buyer-neighbourhoods-great-schools

Steve Saretsky and David Larock join this month's roundtable on the housing markets in Toronto and Vancouver. The fall market stalled in September, and the panel explains why a big rebound looks unlikely before year end. Rates are also moving the wrong way for buyers. Even with the Bank of Canada on hold, fixed mortgage rates are rising. David explains what's driving that and what it means for borrowers. Finally, will Canada let foreign buyers back in? With the federal ban set to expire, Ottawa is considering allowing foreigners to buy new homes. The panel debates whether that would help clear unsold condos or bring back the speculation that created the glut.

For more than a decade, Canadians borrowed on the assumption that interest rates would always come back down. BMO senior economist Robert Kavcic says that assumption no longer holds. In this episode, Robert explains why BMO believes the era of low real interest rates is officially over. He sees it as a long-term shift, not a temporary spike that the next rate-cutting cycle will undo. We discuss what that means for housing, especially in the GTA. Robert sees the market splitting in two. Larger ground-oriented homes are firming, while the small condo market remains saturated and investors have largely walked away. He says he can see house prices levelling off while condo prices continue to trend down. We close with the AI-driven stock market boom, which Robert places in the "seventh inning stretch" of a classic asset bubble, and what happens when it ends. Robert Kavcic is Director and Senior Economist at BMO Capital Markets. His research is available at economics.bmo.com.

Every month, John Pasalis and Davin McMahon take real situations from real people and work through them on air. This month, four of them come back to the same question from different directions: what do you do when you think prices haven't finished falling? A buyer who has been waiting since last year wants to know what a bottom actually looks like in the data, before it's obvious to everyone. A couple in Etobicoke has been on the market since May, cut their price twice, and can't get an offer. A pair of empty nesters with no mortgage are wondering whether to sell, rent for a few years, and buy back in. And a small landlord is $900 a month out of pocket on a condo with a tenant who isn't going anywhere. Then a fifth situation, which is about what a slow market does to the people selling houses rather than the houses themselves. Two first-time buyers with a hard $800,000 ceiling keep getting shown listings $75,000 to $100,000 above it, on the theory that those sellers are desperate.