Weekly Market Pulse

I end each week by reviewing rates, spreads, policy signals, and market pricing across both public and private assets. Here’s what caught my attention. Government of Canada yields moved modestly lower on the day but remain higher across most tenors over the three to twelve month window, mortgage bond spreads were largely unchanged, and housing starts delivered a new monthly print that meaningfully altered the supply narrative. It is important never to look at real estate in isolation, and this week’s data reinforced how tightly capital markets, construction activity, and rental fundamentals are intertwined.

Featured Metric Deep-Dive

This week I focused on housing starts. CMHC total housing starts, which are reported monthly rather than weekly, came in at 254,058 units on a seasonally adjusted annualized basis. That represents a 9.1 percent increase month over month and a 3.4 percent increase over three months, though starts remain down 9.1 percent over six months and 3.2 percent year over year. Housing starts are one of the clearest forward indicators of future supply, particularly relevant for multifamily underwriting. A rebound in starts on a one month basis does not immediately change market balance, but it does affect how aggressively I model rent growth and vacancy two to three years out.

From a cash flow perspective, small changes in future supply assumptions compound quickly. On a 75 unit apartment building producing $1.8 million in annual gross rent, a 50 basis point reduction in long-term rent growth assumptions due to higher anticipated completions reduces year five net operating income by roughly $9,000 annually. Capitalized at a 6.00 percent exit rate, that is approximately $150,000 of value. Housing starts do not dictate near-term pricing, but they directly influence the risk envelope I underwrite against today.

Yield Curve Analysis

The Canadian yield curve is positively sloped across the term structure. The one year Government of Canada yield sits near 2.41 percent, the five year around 3.00 percent, and the ten year approximately 3.44 percent. The shape of the curve reflects a shallow but upward sloping profile, signaling persistence rather than stress. Directionally, yields are down slightly on the day and week, but higher over the one to three month window across most maturities, and meaningfully higher versus twelve months ago at the short end. I interpret this as markets pricing fewer near-term policy cuts and demanding a higher term premium for duration risk, not forecasting a sharp economic contraction.

Current Financing Environment

That persistence shows up clearly in financing markets. Five year CMHC insured fixed mortgage rates are holding around 3.99 percent, unchanged across all recent periods except a 55 basis point increase year over year. Five year uninsured fixed rates remain near 4.49 percent, also flat week to week but 25 basis points higher than a year ago. On the commercial side, the five year Canada Mortgage Bond yield is approximately 3.10 percent and the ten year around 3.63 percent. Spreads over Government of Canada equivalents remain contained, with the five year mortgage bond spread near 10 basis points and the ten year near 19 basis points. Compared to last year, borrowing costs are still elevated, but the lack of short-term volatility is improving my confidence in locking longer duration debt.

Market Signals

The Bank of Canada policy rate remains at 2.25 percent, unchanged this week and down 100 basis points from twelve months ago. CORRA and term CORRA rates are similarly stable. There is no signal of renewed tightening in policy, but financial conditions remain firm because market yields and mortgage rates have not retraced materially. Housing starts are sending a mixed message, a short-term rebound layered on top of a longer-term slowdown. I’m also watching mortgage bond spreads closely, as they often move ahead of changes in lender behavior and credit availability.

My Strategic Positioning

• I am underwriting acquisitions with conservative rent growth assumptions beyond year two, reflecting recent housing starts data rather than near-term demand optimism.

• I am prioritizing five to ten year fixed-rate debt where yield volatility has compressed and cash flow visibility is highest.

• I am remaining selective on new deployments, focusing on assets that are resilient at current financing costs rather than reliant on rate compression.

Macro Context

Equity markets continued to perform strongly. The TSX closed near 31,955, up 1.2 percent on the day and more than 30 percent over the past twelve months. The S&P 500 ended around 6,911, up 1.1 percent on the day and over 15 percent year over year. Risk appetite remains robust, even as the MOVE index remains elevated on a longer-term basis. For real estate, this divergence matters. Strong equity markets support employment, household formation, and consumer confidence, all of which feed rental demand. At the same time, capital allocation into private markets tends to lag, which keeps transaction volumes subdued and pricing adjustments gradual.

Bottom Line

This is a market defined by stability rather than acceleration. Rates are not falling quickly, supply signals are mixed, and equity markets remain optimistic. For my own portfolio, that combination favors disciplined underwriting, longer-term financing, and a clear focus on in-place cash flow. The risks are not hidden, they are visible in higher debt costs and uneven supply trends. The opportunity lies in structuring deals that remain durable if conditions simply persist rather than improve.

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.