The latest Canadian jobs report made headlines and not for good reasons. In July, Canada lost 41,000 jobs, including a drop of 51,000 full-time positions and 39,000 part-time positions. Youth unemployment (ages 15–24) climbed to 14.6%, the highest since 2010 outside of pandemic years.
While these numbers signal economic softness, the Bank of Canada (BoC) isn’t expected to rush into more interest rate cuts as we have noted in past blogs. Instead, policymakers will likely hold steady, focusing on inflation control and monitoring global economic risks before making any moves.
So, what does this mean for you and future homebuyers in BC? Let’s break it down.
1. Mortgage Rates Are Likely to Stay Higher for Longer
Variable rates: The BoC’s policy rate is expected to remain at 2.75% through much of 2025. That means variable mortgage rates will likely hold steady unless stronger evidence emerges of a broader economic slowdown.
Fixed rates: These are tied to bond yields, which may drop slightly over the coming months. Forecasts suggest 5-year fixed rates could edge down to 4.2–4.4% by year’s end. It is signs of good news, but not a dramatic change.
To Summarize what this means for you: If you’re waiting for a big drop in rates before buying, you may be waiting longer than expected. While some small decreases are possible, we’re not likely to see the ultra-low rates of 2020–2021 anytime soon.
2. The Housing Market Could Stay Softer
In BC, particularly in expensive markets like Vancouver, the weak job market could temper demand. This may help keep prices from surging in the short to medium term.
CMHC’s 2025 Summer Outlook predicts a ~2% decline in average national home prices, though high-demand neighbourhoods may hold steady or even see modest gains.
What this means for you: Buyers may still find more negotiating power, especially in higher-end properties or in slower-moving segments of the market such as condominiums. Sellers might be more open to incentives, closing cost contributions, or longer possession timelines.
3. Smaller and Slower Rate Cuts Ahead
Even with weaker job growth, the BoC is likely to approach rate cuts cautiously. Most economists expect gradual reductions of 0.25% at a time, possibly starting late 2025 or early 2026.
To Summarize: If you’re planning a purchase in the next 6–12 months, don’t count on significant rate relief to make affordability dramatically easier. Instead, plan based on today’s rates, and treat any future cuts as a bonus. If you can lock in a fixed rate at an affordable point, stick with it; however, variable may be the route to go.
How New Home Buyers Can Prepare for the 2025 Market
Here are strategies that work across all buyer types—from first-time buyers to investors:
Bottom Line
The weak jobs report has added uncertainty to Canada’s economic outlook, but it hasn’t changed the mortgage rate landscape overnight. Rates are expected to stay elevated longer, the housing market may stay cooler in some areas, and buyers who act strategically could find opportunities in 2025.
If you’re buying in BC this year, focus on locking in good financing, negotiating smartly, and planning for the long game. The market may not be as frenzied as past years—but that can work in your favour.
Ready to make your move in BC’s 2025 real estate market?
At Coastal Key Homes, we help buyers and investors navigate changing markets with confidence. Whether you’re looking for your first condo, upsizing to a family home, or expanding your investment portfolio, we’ll guide you through every step—from securing the best mortgage rate to negotiating the right price.
📞 Call Ian Joseph Iacovitti, REALTOR® at 778-836-8965
📧 Email: Ian.iacovitti@gmail.com
🌐 Visit: www.coastalkeyhomes.ca