Weekly Market Pulse

What caught our attention this week is that the Government of Canada yields continue to send mixed signals depending on maturity, housing starts delivered a strong monthly print without materially changing the medium-term trend, and financing markets remain stable but restrictive despite modest year-over-year rate relief. It is important never to look at real estate in isolation, and this week’s data reinforced how much nuance still matters beneath the headlines.

Featured Metric Deep-Dive

The metric we focused on this week is housing starts. CMHC total housing starts, which are reported monthly, came in at 282,439 units on a seasonally adjusted annualized basis. That represents an 11.2 percent increase month over month, but only a 1.1 percent increase over the prior three-month period. Over six months, starts are effectively flat, and they remain meaningfully higher on a year-over-year basis. This matters because a strong single-month print can reflect timing effects, weather normalization, or project batching, whereas the three- to six-month trend is what ultimately shapes future supply conditions. From an underwriting perspective, that distinction is critical. A modest three-month increase points to stabilization rather than acceleration in new supply. On a 100-unit multifamily asset producing $2.4 million in annual gross rent, adjusting long-term rent growth assumptions downward by just 25 basis points in response to slightly higher anticipated completions reduces stabilized year-five net operating income by roughly $6,000 annually. Capitalized at a 6.25 percent exit rate, that equates to approximately $95,000 of valuation impact. Housing starts are not signaling excess, but they are reminding us to stay disciplined on forward growth assumptions.

Yield Curve Analysis

The Canadian yield curve remains positively sloped across maturities and is not inverted. The one-year Government of Canada yield is approximately 2.39 percent, the five-year sits near 2.97 percent, and the ten-year is around 3.39 percent. Over the past twelve months, the short end of the curve has moved materially lower, with the one-year yield down roughly 59 basis points, while longer-dated yields have edged higher, with the ten- and twenty-year yields up approximately 8 and 30 basis points, respectively. This configuration reflects a market that has repriced near-term policy expectations lower while maintaining a higher term premium on duration. I read this as persistence rather than stress. The curve is shallow but healthy, signaling moderation and caution, not contraction.

Current Financing Environment

The Five year CMHC insured fixed mortgage rates are holding at approximately 3.99 percent, unchanged across all short-term periods and still about 40 basis points higher than a year ago. Five year uninsured fixed rates remain around 4.49 percent, also flat week to week and month to month, but 25 basis points higher year over year. On the commercial side, the five year Canada Mortgage Bond yield is roughly 3.06 percent, while the ten year sits near 3.58 percent. Mortgage bond spreads remain contained, with the five year spread around 9 basis points and the ten year around 19 basis points. Compared to mid-2024, debt is clearly more expensive, but the lack of short-term volatility is making longer duration financing easier for us to underwrite with confidence.

That persistence is evident in financing markets. Five-year CMHC-insured fixed mortgage rates are holding at approximately 3.99 percent, largely unchanged across recent weeks and months, but now about 40 basis points lower than a year ago. Five-year uninsured fixed rates remain near 4.49 percent, similarly stable in the short term and approximately 25 basis points lower year over year. On the commercial side, the five-year Canada Mortgage Bond yield is roughly 3.06 percent, while the ten-year sits near 3.58 percent, both reflecting modest easing from last year’s highs rather than a full normalization. Mortgage bond spreads remain contained, with the five-year spread around 9 basis points and the ten-year near 19 basis points signaling steady lender risk appetite. Compared to mid-2024, debt remains expensive in absolute terms, but the combination of lower year-over-year rates and reduced volatility is improving our confidence in underwriting longer-duration financing. The market is no longer tightening, but it is also not offering the kind of rate relief that would materially reset valuations.

Market Signals

The Bank of Canada policy rate remains at 2.25 percent, unchanged this week and down meaningfully from its level a year ago. CORRA and term CORRA rates are similarly stable. There is no signal of renewed policy tightening, but financial conditions remain restrictive because market yields and mortgage rates have not followed policy rates materially lower. Housing starts are sending a balanced signal, a short-term rebound layered on top of a largely stable medium-term trend. We are also watching mortgage bond spreads closely, as they often move ahead of changes in lender behaviour and credit availability.

Our Strategic Positioning

• We are looking to underwrite new acquisitions with conservative forward rent growth assumptions that reflect stable but not tightening supply conditions.

• We are prioritizing fixed-rate financing in the five- to ten-year range where rate volatility has compressed and cash flow visibility is highest.

• We are pacing capital deployment deliberately, focusing on assets that remain durable at current financing costs rather than relying on future rate compression.

Macro Context

Equity markets remain constructive. The TSX continues to trade near recent highs, up strongly on a year-over-year basis, while the S&P 500 has also posted solid gains over the past twelve months. Risk appetite in public markets remains intact even as rate volatility persists beneath the surface. For real estate, this divergence matters. Strong equity performance supports employment, household formation, and rental demand, while elevated bond market uncertainty continues to dampen transaction volumes and slow price discovery in private markets. We are also watching broader macro forces closely, including immigration-driven population growth and affordability constraints, both of which continue to support rental demand across multifamily assets.

Bottom Line

This is a market defined by stability rather than momentum. Rates have eased modestly year over year but remain restrictive. Supply signals are balanced, not benign, and equity markets remain optimistic while real estate continues to adjust methodically. For our portfolio, the environment favours discipline, conservative assumptions, and a focus on in-place cash flow. The opportunity is not in forecasting rapid improvement, but in structuring investments that remain resilient if current conditions simply persist.

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.