Weekly Market Pulse

Strategic Insights for Canadian Real Estate Investors

Week of November 24, 2025

Every Monday morning, I review the same data points because successful real estate investing is about understanding the economic signals that drive property values and returns. This week's numbers reveal an opportunity that investors should be paying close attention to. Here's what caught my attention: the Canada Government 5-year bond has settled at 2.80%, marking a 48-basis-point decline over the past twelve months. For those new to reading these indicators, let me explain why this matters to a real estate investment portfolio. The 5-year government bond rate is the single most important predictor of mortgage costs; understanding this relationship is what separates profitable acquisitions from marginal ones. The math is straightforward: if we assume a 2.80% bond yield, add the current mortgage spread of approximately 120 basis points, we're looking at fixed rates in the 4.00% range. We've watched mortgage rates climb as high as 6.5% in recent memory, and I think we all understand that the difference between a 4% mortgage and a 6% mortgage isn't just numbers on paper. On a $500,000 investment property, that 2% spread translates to approximately $540 in monthly cash flow difference. Over a year, that's $6,480 that either flows to your bottom line or doesn't. That's the difference between a property that pays you to own it and one that costs you money every month.

What the Yield Curve Is Telling Us

I'm also seeing something in the current yield curve structure that experienced investors will recognize as significant. The curve is positively sloped, meaning that short rates at 2.34% (2-year) rising steadily to 3.24% (10-year). This normal curve shape tells me the bond market expects stable, modest growth without inflation shocks or recession fears. This matters because this curve shape historically correlates with the healthiest periods for real estate investment. We're not in an inverted curve environment (which typically precedes recessions), and we're not seeing the flat curve that suggests economic uncertainty. We're in the sweet spot. In my own investment decisions, this information guides my debt strategy. This environment favours locking in medium-term fixed rates. The certainty of knowing your mortgage payment for the next five years, combined with the reasonable cost of that certainty, is exactly what makes rental property cash flow predictable and bankable.

For example, based on what I'm seeing in the market right now, investors are accessing financing at rates that seemed unlikely 18 months ago. The 5-year fixed mortgage spread has normalized at 120 basis points, at a historical sweet spot. This isn't the artificially compressed spreads we saw during the pandemic stimulus period, but it's also not the elevated spreads we endured during the 2022-2023 rate shock.

Current market rates:

• 5-year fixed rates for conventional mortgages: 3.95-4.25%

• Multi-unit residential financing: 4.25-4.75%

• Commercial property rates: 5.00-5.75%

These rates allow positive cash flow in most major Canadian markets, assuming proper underwriting at appropriate cap rates with solid due diligence on rental demand.

Reading the Market Signals

The Bank of Canada rate holding at 2.25% indicates to me that we've reached a policy plateau. After the aggressive tightening cycle that began in 2022, we're now in a period of stability. I expect rates to hold here for the foreseeable future, barring any significant economic shocks. This stability is ideal for real estate investors because it means that you can build a five-year business plan without worrying about your financing costs steeply increasing. I'm also watching the housing starts data closely. At 232,765 units, we're seeing a 16.6% month over month decline in new construction. From an investor's perspective, this supply constraint is a tailwind. Less new supply means your existing properties face less competition for tenants, which supports both occupancy rates and the pricing power needed to push rents in line with inflation. Based on these indicators, here's what I'm intending to do with my own investment strategy:

• Active acquisitions: This is an execution environment. The combination of reasonable debt costs and a market that's reset from the 2021-2022 peak creates genuine opportunity. I'm watching for disciplined sellers and deals that pencil out with healthy margins. My approach is to underwrite conservatively—I'm assuming 4.5% on future refinances, not 3%, and building in proper reserves.

• Financing strategy focus: When I look at portfolio debt structures, the refinancing opportunity stands out immediately. Any mortgages carried at 5.5% or higher that are coming up for renewal represent significant savings potential. On a $1 million portfolio, dropping from 5.5% to 4% interest saves $15,000 annually. That's capital that can be redeployed into the next acquisition.

• The timing perspective: The risk-reward profile has improved dramatically from 12-18 months ago. You're not buying at peak prices with peak rates anymore. The investors who build wealth are the ones who recognize when the crowd has retreated and fundamentals have aligned. I believe we're in that window now.

The Macro Context

It is important never to look at real estate in isolation. The TSX at 29,933 and the S&P 500 at 6,556 tell me we're in a risk-on environment with strong corporate earnings and employment. This translates directly to rental demand. When equity markets are healthy, employment is typically strong, wage growth is positive, and tenants can afford rent increases that keep pace with your operating costs. The CMHC data, combined with these equity market signals, paints a picture of an economy that's growing modestly but steadily, exactly the environment where leveraged real estate investments outperform.

Bottom line, I believe that we're in one of the more favourable environments for strategic real estate investment that we've seen since 2020. The difference is, we're here with realistic expectations and debt costs that allow actual cash flow rather than speculative appreciation plays. The investors who recognize this opportunity and execute with discipline will look back on this period as a wealth-building inflection point. Understanding these indicators is fundamental in real estate investment. These are the same data points I review every week to guide my own investment decisions and market positioning.

Important Disclosures

This analysis is provided for informational and educational purposes only and does not constitute investment advice, financial advice, trading advice, or any other sort of advice. The content represents my personal views and analysis of market conditions as of November 24, 2025, and should not be construed as a recommendation to buy, sell, or hold any particular investment or security. Past performance is not indicative of future results. Real estate investments involve substantial risk, including but not limited to: market risk, interest rate risk, liquidity risk, leverage risk, and the potential for total loss of capital. Market conditions, interest rates, government policies, and economic factors can change rapidly and materially affect investment outcomes. The interest rates, spreads, and market data referenced herein are subject to change without notice and may not reflect the rates or terms available to all investors. Actual financing terms will vary based on individual creditworthiness, property characteristics, loan-to-value ratios, and lender-specific underwriting criteria.

All investors should conduct their own due diligence and consult with qualified legal, tax, and financial advisors before making any investment decisions. This content does not take into account your specific investment objectives, financial situation, or particular needs. No warranty or guarantee is provided regarding the accuracy, completeness, or timeliness of the information presented. While data sources are believed to be reliable, errors and omissions may occur. Market data and economic indicators are subject to revision. Real estate investments are illiquid and may not be suitable for all investors. Leverage amplifies both gains and losses. Forward-looking statements and market predictions are speculative in nature and involve known and unknown risks and uncertainties.