For sure, maybe

Poor Gregor.

You’ll recall that on Day One of being the new housing czar, Gregor Robertson was asked if Canadian house values needed to fall to prevent Gen Z from sneaking in and murdering everyone during sleep.

Nah, he said. And so he was done. Like dinner.

Speaking to MPs this week, he tried again. Yes, prices have to decline, he revised. But on average. In the aggregate. Not by making existing homes sell for less, but by the government causing more social housing and cheapo modular units to be built, bringing down the average. By a few bucks.

Well, we all know that’s not going to happen. No affordable, subsidized freehold government housing has yet hit the market. None may appear for several years. Almost all housing starts will be market-driven, and currently the market is lying there prone with four paws in the air. In the absence of robust new-home construction, resale stuff will only get more valuable as demand returns.

And that brings us to this morning.

The latest inflation rate came in somewhat hot at 2.4%. The increase from the month before (which was 1.9%) was blamed mostly on gas and food. Core inflation was up a little, but not alarmingly. Rent swelled statistically, but evidence is that lease rates are now falling. The headline number was higher than most economists expected, but the stuff under the hood wasn’t scary.

“One hotter-than-expected month does not a new trend make,” says TD analyst Andrew Hencic, “but it is worth monitoring whether the strength in price pressures is indicative of ongoing consumer resilience.”

In general we all know what’s happening. The labour market is weaker than it was. Trade numbers are down. The economy is not in recession, but flirting with it. Consumer confidence is weak. Real estate sales prove that. Business confidence is soft and investment intentions are tepid. Nobody trusts Trump. Things could get worse instantly, despite the best efforts of a level-headed, president-stroking progressive conservative prime minister.

In this environment, says Bay Street, the Bank of Canada has to cut rates again a week from tomorrow.

“Suffice it to say this will make the Bank of Canada’s decision a bit more interesting next week than previously expected,” says BMO chief economist Doug Porter. “Markets had been all but baking in a rate cut after Governor Macklem’s dovish remarks and yesterday’s soft Business Outlook Survey.”

This morning, by the way, the odds of another interest rate plop next week sat at 69%.

“We think that core measures of inflation were just about subdued enough, and the economy is certainly weak enough, to still justify a further 25bp cut from the Bank of Canada next week, CIBC’s Andrew Grantham told bank clients. “However, after that the Bank is likely to move back onto the sidelines, in part due to evidence of some lingering inflationary pressures, but also on the assumptions that economic growth starts to recover and progress is made towards a trade deal that reduces some of the sector specific tariffs currently impacting Canadian trade.”

Hencic agrees. “The Bank of Canada should still have room to deliver another cut. The economic outlook is fraught with risks, and the elevated unemployment rate reflects an economy with ample slack.”

Okay, so it looks like the chop is back on, despite a steamier CPI report. Without more central bank stimulus, the big dogs tell us, we risk shedding confidence, growth and jobs. Already the unemployment rate in the mighty GTA (where 15% of the entire population lives) is trending towards 10%. There are almost 51,000 unsold housing units, thirty thousand of them resales. Prices for the latter have dipped by 27% since the high-water mark in 2022 – which is historically meaningful. (The greatest plop ever was 32%.)

If it happens, another rate cut will nip the cost of variable home loans and bring 3% money into plain view. It’s what the starving Audi and Range Rover people have been praying for. And recall the inverse relationship between real estate values and interest rates. Will it hold again?

Well, we’ll see. So far it’s been a deadly autumn housing market, but sad sales have not brought more price declines. Now cheaper mortgage money suggests more demand and offers. It also suggests Gregor get a muzzle. Sit. Stay.

About the picture: “Today I snapped these two fine pups waiting for their owner outside an eatery on 4th Ave in Kitsilano,” writes Dan. “I got the distinct impression they had better things to do than wait around while their master was chowing down. But hey, it’s a dog’s life. You may want to give them a moment in the sun sometime.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/10/21/for-sure-maybe/