Weekly Market Pulse

This week the data is showing a market that is no longer moving in a straight line. Some indicators are stabilizing, others are quietly rolling over, and the gaps between them are where I’m spending most of my time. These are the same data points I review every week, but the relationships between them are shifting in ways that matter for underwriting and timing.

Featured Metric Deep-Dive, Housing Starts

This week I’m focusing on housing starts, because supply signals tend to change before pricing ever does. CMHC total housing starts are currently running at 254,058 units on a monthly basis. On the surface that number looks healthy, but the trend matters more than the headline. The one month change is flat, while the three and six month figures are both up 9.1 percent, and the twelve month comparison is down 3.2 percent.

Housing starts feed directly into future rental supply with a long lag, especially in multi-unit projects where entitlement, construction, and lease-up stretch across several years. Flat short-term momentum combined with uneven medium-term growth tells me that developers are still selective, not aggressive. From an underwriting perspective, this matters because even modest underbuilding compounds quickly. If on a 50-unit property we assume a three percent rent growth, a tighter supply environment can easily turn that into four percent. On a building generating $900,000 in annual gross rent, that extra percentage point is roughly $9,000 per year, which capitalized at a 5.5 percent cap rate translates into more than $160,000 of incremental value. It is important never to look at real estate in isolation, and housing starts are one of the earliest signals of where future rent pressure may emerge.

Yield Curve Analysis

The yield curve remains upward sloping, but it is doing so unevenly. The Government of Canada 2-year yield sits around 2.73 percent, while the 5-year is near 2.97 percent, and the 10-year has moved up to approximately 3.41 percent. The long end has drifted higher over the past month, while shorter maturities have been more anchored. I’m also watching the 20-year yield at roughly 3.71 percent, which tells me longer-term inflation expectations are not fully extinguished. This curve shape suggests the market is pricing slower growth, but not a sharp contraction, which aligns with the mixed signals I’m seeing in real assets.

Current Financing Environment

Financing conditions reflect this same push and pull. Five-year CMHC insured fixed rates are holding around 3.99 percent, which remains historically attractive despite the recent back-up in government yields. Uninsured multi-unit financing is clearing higher, generally in the 4.5 percent range depending on leverage and asset quality. On the commercial side, mortgage bond yields tell a similar story, with the 5-year Canada Mortgage Bond sitting near 3.07 percent, up modestly over the past month. Relative to where rates were two years ago, capital is still cheap, but relative to last quarter, lenders are clearly more cautious in how they price risk.

Market Signals

The Bank of Canada policy rate remains at 2.25 percent, and I’m also watching CORRA closely as short-term funding costs stabilize. Prime is sitting at 4.45 percent, which continues to weigh on variable-rate borrowers. Housing starts, as noted earlier, are not accelerating meaningfully, and that tells me supply discipline remains intact. Combined with steady employment and population growth, this reinforces my view that rental fundamentals are unlikely to weaken materially in the near term, even if transaction volumes stay muted.

My Strategic Positioning

• I’m prioritizing acquisitions where modest rent growth assumptions still produce acceptable returns at today’s financing costs

• I’m looking to structure deals with longer fixed-rate terms to reduce exposure to short-term rate volatility

• I’m staying patient on pricing, prepared to move quickly when motivated sellers emerge

Based on these indicators, here’s what I’m intending to do, remain selective, stay liquid, and let the data, not sentiment, dictate timing.

Macro Context

Equity markets are sending a more optimistic signal. The TSX is trading around 32,024, up meaningfully over the past year, while the S&P 500 sits near 6,936. Risk assets continue to perform well, even as volatility remains elevated. This matters for real estate because strong equity markets support household balance sheets and rental demand, particularly in urban centres. I’m also watching energy prices, with crude hovering in the mid-$50 range, as that has downstream effects on regional employment and migration patterns.

Bottom Line

Overall, the market feels balanced, not euphoric, not distressed. Financing is available but not loose, supply growth is controlled, and macro conditions remain supportive of rental demand. The risk, in my view, lies in assuming yesterday’s pricing dynamics will return quickly. Discipline matters here. The opportunity lies in understanding how small shifts in rates and supply compound into meaningful changes in value over time.

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.