📊 Market Snapshot

Ontario Active Listings

↓ 5.1% YoY (73,890)

BoC Overnight Rate

2.25% (Unchanged)

5 Yr GoC Bond Yield

↑ 3.35%

Ontario Avg Home Price

↓ 2.9% YoY ($797,486)

GTA Avg Home Price

↓ 4.5% YoY ($1,003,956)

GTA Home Sales

↓ 0.9% YoY (5,995)

National Home Sales

↓ 5.3% YoY

📰 Top Story

The Bank’s Own Researchers

Just Argued Against The Cut

Every realtor and broker on this list has a client waiting for September 2. Last Thursday, the Bank of Canada quietly published the strongest argument yet that they are waiting for the wrong thing. A staff analytical paper by Benjamin Straus, Stéphane Surprenant and Kerem Tuzcuoglu — “How Do Interest Rates Spur the Housing Market” — lands on one finding: rate cuts lift housing demand fast and housing supply slowly, so monetary policy “appears unable to alleviate housing affordability pressures and may instead intensify them when labour market conditions are strong.”

The mechanism is the timeline. Easing boosts resales quickly, raises housing starts only with a delay, and pushes prices up persistently. Buyers respond to cheaper credit in months; builders respond on permit-and-planning clocks, and only when a project pencils — so the new supply a cut summons arrives into demand the cut itself created. And the effect is strongest when it is least wanted: cuts move sales, construction and prices hardest when unemployment is low. One honest caveat: the study runs on Canadian data from 1988 through 2019, before the pandemic — but the mechanism it describes is the one your waiting clients are betting against.

This is not a forecast about September 2, and the researchers do not speak for the Governing Council. It describes what any cut does once it happens. The client script — wait for the cut, then buy cheaper — assumes relief arrives before competition. The Bank’s own evidence reverses the order: a cut delivers the waiting buyer other buyers first, and homes years later.

Meanwhile, the side of the market that was never waiting on the Bank kept moving. Fixed pricing follows the bond market, and the bond market spent the week climbing — which is where this issue picks up.

Why It Matters

• For realtors: Stop selling the wait. Price the listing you have against the demand a cut would pull forward, and have that seller conversation before September 2 — the listings that will compete after a decision are already on the market.

• For mortgage brokers: Model a hold and a cut side by side, in writing, for every renewal in your book, so the client is choosing rather than hoping. The fixed side reprices off the five-year yield, which already moved — any quote older than a week is stale.

• For everyone: Cheap money arrives in months. Homes arrive in years. The distance between those two dates is what your clients pay.

🗞️ Rest of the News

The Tariffs Landed.

The Rate That Moved Wasn’t The Bank’s.

The 50 per cent Section 338 duties were due at 12:01 a.m. Wednesday, August 19. Hours before the deadline, Washington paused them three days, citing progress toward a broader deal. The deal never arrived — talks broke down, Prime Minister Carney suspended negotiations and recalled Canada’s team, and the duties took effect at 12:01 a.m. Saturday, August 22. Dairy, alcohol and motor vehicles are the headline sectors, roughly US$20 billion in annual imports, and USMCA origin does not exempt a covered good.

And here is last week’s promise, paid: through all of it, the Bank’s rate never twitched. The five-year Government of Canada benchmark did — 3.28, 3.31, 3.29, 3.30, then 3.35 on Thursday, the highest close of this run, up from 3.23 the week before.

Why it matters:

The rate on your client’s file moved before the tariffs even attached. Fixed pricing follows that line, not the overnight rate — a pre-approval locked before August 17 is now your client’s best asset, and a quote from ten days ago belongs in the recycling.

Ontario Checked Back Into Balance

CREA’s July package landed August 18 — the release we have owed you for two issues. Ontario sales came in at 16,276, down 1.3 per cent from last July, while new listings fell 10.8 per cent to 36,945 and the provincial benchmark eased 3.9 per cent to $749,800. Nationally, 43,578 homes traded — down 5.3 per cent year over year but up 0.5 per cent month over month seasonally adjusted, a fourth straight gain — and the sales-to-new-listings ratio tightened to 51.3 per cent. CREA’s senior economist says the Greater Golden Horseshoe has shifted from buyers’ territory back into balance, and Ontario’s months of inventory now sits about half a standard deviation above its long-run average.

Why it matters:

The discount is shrinking, not deepening. The negotiating room your buyers had in the spring is quietly closing, and the sellers who priced to March conditions are the last to know.

Toronto Starts Keep Sliding

CMHC’s July numbers, also out August 18, put actual national housing starts at 18,834 — down 19 per cent from July 2025 — with the year-to-date total at 131,851, off 4 per cent. Toronto fell 10 per cent on weaker multi-unit starts, Vancouver dropped 42, Montreal rose 3. Units under construction were flat at 373,091, and completions rose 8.1 per cent as projects started in better years finish out.

Why it matters:

Read this beside the top story. The supply a rate cut is supposed to summon runs on this clock — and this clock is slowing. Today’s start drought is 2028’s listing drought.

The Last Cheap Mortgages Come Due

Royal LePage’s 2026 Mortgage Renewal Survey, released August 19, catches the final cohort of pandemic-era borrowers arriving at renewal. Thirty-eight per cent expect a higher payment — down sharply from 57 per cent in early 2025 — including 12 per cent bracing for a significant jump, and 76 per cent of those expecting an increase foresee at least some strain. Yet 71 per cent will not change their living arrangements — though in Toronto, 31 per cent are considering it. At renewal, 43 per cent plan fixed, 16 variable, and 39 have not decided — while 44 per cent intend to shop lenders before signing.

Why it matters:

Four in ten renewers undecided, and nearly half planning to shop, is the most contactable pipeline either side of this audience gets all year — and unlike the waiting buyer, it does not depend on September 2.

Regional Spotlight: CAMBRIDGE

Tightening without a floor

Cambridge makes its first appearance in this slot, and it arrives with a puzzle. The July print from the Cornerstone Association of REALTORS® puts Cambridge’s MLS Home Price Index benchmark at $662,100 — down 1.3 per cent from June and 6.3 per cent from a year ago, a steeper annual decline than Kitchener-Waterloo next door at $633,300 and minus 5.5. Meanwhile, supply is doing what Brantford’s did last week: regional inventory is down 9.4 per cent year over year, and months of supply sit at 3.9, about 5 per cent tighter than last July.

That is the puzzle — supply tightening for a year, and the benchmark still falling faster than the neighbours’. Shrinking inventory is supposed to be a floor. In Cambridge, so far, it is just a smaller room.

Why It Matters

• For realtors: The shrinking-inventory pitch does not survive this benchmark chart. Price to the benchmark and bring the Kitchener-Waterloo comparison — a Cambridge seller who hears only “supply is down” will price for a floor that has not formed.

• For mortgage brokers: A benchmark down 6.3 per cent under four months of supply is the classic appraisal-lag profile. Build the gap into the financing condition window rather than discovering it the week before close.

⚡ Quick Hits

• THREE PER CENT, WRONG DIRECTION — July inflation rose to 3.0 per cent from 2.8, driven by gasoline at +25.7 per cent; shelter cooled to 1.3 and homeowners’ replacement cost fell 2.1 — housing is now holding inflation down, not up.

• SIX STOREYS, ONE STAIRCASE — TRREB’s new Removing Roadblocks report asks Ontario to permit single-stair residential buildings up to six storeys with sprinklers and floorplate limits attached — the approach British Columbia already allows.

• FIRST GREEN SHOOT SINCE NOVEMBER 2024 — the national MLS Home Price Index edged up 0.1 per cent from June to July, its first monthly increase in twenty months.

• OTTAWA’S QUIET FIVE-YEAR HIGH — 1,325 July sales, up 0.2 per cent, the best July in five years — with single-family up 5.0 per cent while apartments fell 6.6.

⛏️ Tip of the Week

Quote The Right Table

The Bank of Canada publishes two five-year yields, and they are not the same number. Last Thursday the Selected Benchmark five-year closed at 3.35 per cent; the 3-to-5-year Marketable Bond Average closed at 3.30. Lenders price fixed mortgages off the benchmark. Pull from the Selected Benchmark Bond Yields table, note the close date beside the number, and refresh before any offer goes in — five basis points of table confusion is real money on a quote, and in a week where the line moved twelve, an old pull is worse than no pull.

⁉️ Trivia / Poll

Question: 38 per cent of Canadians renewing a mortgage this year expect a higher payment. When Royal LePage last asked, in early 2025, what share said the same?

A) 42 per cent

B) 57 per cent

C) 61 per cent

D) 46 per cent

(Answer at the bottom.)

📓 Closing Note

The week answered its own questions. The tariffs finally attached, every print landed on schedule, and the only rate that moved was the one nobody votes on — while the Bank’s own researchers explained why the rate everyone is waiting on cannot build a home. The fall sorts your files into two piles: the buyer waiting for relief that arrives as competition, and the renewal whose date shows up regardless. The second pile pays.

Three dates now decide the next chapter: the Bank speaks September 2, its first word since the tariffs became real; TRREB’s August numbers follow within the week; CREA’s land September 15. Next Tuesday we will tell you whether lenders repriced off that 3.35 before the Bank said anything at all.

See you next Tuesday.

Answer: B) 57 per cent — per Royal LePage’s survey, the share expecting a payment increase has fallen from 57 to 38 in eighteen months. The pandemic-peak renewals have mostly rolled through; the anxiety is concentrating, not spreading.

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