Clear as mud

Last week American realtors did it. Today our guys did the same. Pump next year.

“We continue to see clues that underlying demand for housing is picking up steam,” says CREA’s head wizard, Valérie Paquin. “All eyes will be on next year’s spring market to see if all that pent-up demand will finally come off the sidelines in a big way.”

A big way?

That’s also the talk coming out of housing mega-pumper, Royal Lepage. It says sales will jump almost 8%, reaching the highest level since the germy days of 2021. Average prices will rise – maybe 3% or more – and the recovery is expected to be driven by “improving affordability, renewed buyer confidence, and potential further interest rate cuts”.

Hmm. And what inklings of hope does CREA now see in a world riddled with Trump anxiety, economic torpor, swollen public debts and Ani, the chatbot sexpot?

Well, invetory is down, it points out, and sales have been ticking higher. The 189,000 properties now for sale across Canada is “very close to the long-term average”, so no panic there. “Combined with an increase in sales activity, the sales-to-new listings ratio tightened to 52.2% compared to 51% recorded in September. The long-term average for the national sales-to-new listings ratio is 54.9%, with readings roughly between 45% and 65% generally consistent with balanced housing market conditions.”

This is not actually a buyer’s market any more, says CREA, and things will change materially if the Bank of Canada coughs up a few more rate cuts.

Source: CREA, MLS

But wait. We have news.

The latest inflation stats were out this morning. The CPI dropped a little and settles at 2.2%, thanks to gas, mostly. Insurance costs and cell phone plans were up – but this was largely a yawner report which all the economists interpreted as meaning one thing. And it was not in the realtors’ favour.

“Overall, this does little to change the BoC’s view that underlying inflation remains close to 2-1/2%,” says BMO Economics. “But, if anything, most underlying metrics have been stuck a bit above that, or have just crept up there. In other words, this report is just another reason to believe the Bank is moving to the sidelines in December.”

No cut next month, kids. And the other guys confirm it. Perhaps none for a while.

“The Bank of Canada delivered a cut at their past meeting and signaled there wasn’t much more they could do in the current economic environment – a view we have shared for some time,” say the economists at TD. “This month’s report doesn’t change the story much, inflation is unlikely to fall below the lower end of the target range given the disruptions on the supply side of the economy, but it also unlikely to sharply accelerate amid expectations for tepid domestic demand.”

The forecast: “Markets remain on the same page, putting the odds of a cut by next April at roughly 30%.”

Wha? Only a one-in-three chance we’ll see any erosion in mortgage rates by the key spring rutting season? This is a dramatic change from the prevailing forecast just a few months ago – when Bay Street envisioned a full 1% plunge in the CB policy rate a’coming.

But over in the dark, twisted crevasses of CIBC things are even more dire.

“It would take a longer period of easing price pressures, combined with indications of economic growth deteriorating again, to bring the Bank of Canada back off the sidelines,” it says. “We continue to forecast no change in the overnight rate through to the end of next year.”

Seriously? No interest rate relief at all in 2026?

Now, what else could go wrong?

The Carney budget could be defeated in Parliament by some dumb MPs, plunging Canada into a winter election, delaying all this ‘nation-building’ activity and ending up with the same outcome. But minus Pierre Poilievre. Or the Epstein file release could prove Trump was once a diddler, causing a Republican rupture and political chaos resulting in more extreme Presidential actions, like hijacking the Fed. Of course, the AI bubble could deflate rapidly, putting a few trillion in corporate investments at risk and kneecapping markets. Or simply the mounting burden of tariffs might kill off Canadian car-building and steel-making which, combined with the condo construction and trades crash boost the jobless rate and murder buyer confidence.

Or, it could all be okay. Like CREA says. Or great, as Royal Lepage forecasts.

Now you know.

About the picture: “Zoe is a COVID rescue that we saved from oblivion!” writes Leo. “She is part black lab and part whippet that loves to chase squirrels. She a loving companion and cherished member of our family. We can’t imagine our lives without her.”

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

Source: https://www.greaterfool.ca/2025/11/17/clear-as-mud/