Shocking

If you harboured any faint hope of cheaper home loans in the spring, give it up.

The latest job numbers were all Mr. Market needed this morning to realize the Bank of Canada won’t drop the cost of money next Wednesday. Or for many months after that. The current odds for the CB staying on hold at its next meeting are an overwhelming 94%.

And look at 2026. More of the same. No rate relief. The likelihood of rates holding firm at current levels are 78% at the January setting and 80% for the two after that, in March and April. So, no 3% home loans will be coming to save the Spring market – the third year in a row when rutting season turns into drought and realtor remorse.

So what happened with jobs?

Scads of new ones were created while the working population shrunk. That powerful combo sliced the unemployment rate down to 6.5% last month (from 6.9% in October and 7.1% before that). There were 26,000 fewer people in the labour force – showing the impact of the recent Carney slices to immigration and temporary foreign worker levels. And at the same time employers created 54,000 new positions.

Remember, in 2023 and 2024 the population was growing at 3% a year. Now it’s down to 1%. Soon it will be zero. (So go and make some babies.)

Yeah, a whack of the new employment was part-time. But a job’s a job. Between September and November the maple economy actually kicked out 181,000 new paycheques, which is none too shabby a performance. Of those people out of work and looking for a position, a fifth of them were successful last month – better than recently. And in the past month kiddos aged 15 to 24 saw 50,000 more jobs created.

As for wages, they’re rising says StatsCan. Average hourly wages swelled an annualized 3.6% last month – higher than inflation, and at the same time both house prices and rents are going down.

Economists didn’t expect this. The dollar went up. The stock market on Bay Street flared.

“Coupled with inflation that has been running a tad hot of late, this quashes any lingering prospect of a near-term Bank of Canada rate cut,” says BMO chief economist Doug Porter. “There really wasn’t much doubt that the Bank was on hold next week, but the series of good employment gains, and—maybe more importantly—the sudden pullback in the unemployment rate seriously reduces the odds of any further cuts in 2026.”

In fact the econs are now mulling rate hikes next year. One bank (Scotia) is on record calling for two of them. But Porter says not so fast. “We believe that is truly premature, particularly with the dark cloud of USMCA uncertainty rolling straight back onto the landscape in recent days. But the fact that the jobless rate has dropped all the way back to levels prevailing in the summer of 2024 is a very nice way to end off 2025.”

And let’s not forget the latest economic report – solid growth in the latest quarter of 2025, despite you-know-who and the highest US tariffs since the 1930s. It’s an interesting time when the media headlines are negative, people perceive that prices all around them are spiralling, the real estate market is a swamp, cinstruction has crashed and job stress is pervasive – but the statistics are consistently better than anyone expected.

Are people in a self-created funk, or is the economic data all fake? Could we actually be looking at a major turnaround over the next year?

Dunno. But perchance. Two new reports out this week on Canadian real estate hold that glimmer.

“The condo market in Toronto and Vancouver will not clear for a while, with prices continuing to fall in the near future,” says CIBC’s Benny Tal. “However, a lack of new supply might suggest renewed upward pressure on condo prices around 2028. Rent inflation is softening due to increased condo inventory, accelerated activity in the PBR space, and slowing population growth. We expect those conditions to persist in 2026. The resale market is likely to see a relatively weak spring market in 2026, followed by a stronger fall market. Overall, we view 2026 as a transition year from a weak market to a much improved market in 2027.”

Hmm. Ponies for everyone in 2027 – especially those who may see the current housing market as a buying opportunity. Adds RBC’s Robert Hogue: “A broader recovery should gradually emerge as economic momentum builds and labour market conditions improve.”

Did it just start?

About the picture: “I don’t know if you get many 50-year-old photos but this is one,” writes Ray. “Lucky (1961-1975) was a great friend of my teenage years. He never forgot me, even after I moved away from home and got married. Disclaimer: AI had something to do with this restoration.”

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

Source: https://www.greaterfool.ca/2025/12/05/shocking-3/