Weekly Market Pulse

Each week I review the same core set of market data across rates, credit, housing, and public markets to pressure test my assumptions and ensure my portfolio positioning remains grounded in current conditions. Here’s what caught my attention this week. Government bond yields continue to normalize in a very specific way, short-term rates are materially lower than a year ago while longer-term yields are modestly higher, and that divergence is shaping both our financing decisions and valuation discipline.

Featured Metric Deep-Dive

This week I’m focused on Government of Canada bond yields, specifically the one year, ten year, and twenty year points on the curve. These yields form the foundation of almost every underwriting assumption made, from exit cap rates to mortgage pricing. As of this week, the one year Government of Canada yield is approximately 2.36 percent, down roughly 60 basis points from a year ago. The ten year sits near 3.38 percent, about 8 basis points higher year over year, and the twenty year is around 3.70 percent, roughly 30 basis points higher than twelve months ago. This matters because real estate cash flow is extremely sensitive to small changes in long-term rates. On a $10 million multifamily acquisition financed at 60 percent loan to value, a 25 basis point increase in the all-in mortgage rate translates into roughly $15,000 of additional annual debt service. Conversely, the decline at the short end has reduced near-term refinancing risk, improving rollover math even without aggressive rent growth assumptions.

Yield Curve Analysis

The Canadian yield curve remains positively sloped with short-term yields are well below longer-term yields, with roughly 100 basis points separating the one year and ten year maturities. Directionally, yields are marginally lower on the week and one month windows, and split over the twelve month period, with the short end down sharply and the long end modestly higher. I interpret this as a market that has moved beyond peak policy tightening and is now pricing rate persistence rather than rapid easing. The curve is shallow but functional, signaling caution and normalization rather than contraction or stress.

Current Financing Environment

In the financing markets, conditions remain stable and highly predictable. Five year CMHC insured fixed mortgage rates are holding at approximately 3.99 percent, unchanged across all short-term periods and about 40 basis points lower than a year ago. Five year uninsured fixed rates are around 4.49 percent, also flat week to week and month to month, and approximately 25 basis points lower year over year. On the commercial side, the five year Canada Mortgage Bond yield is roughly 3.05 percent, while the ten year sits near 3.57 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 still expensive in absolute terms, but the lack of volatility is making longer duration financing easier to underwrite with confidence.

Market Signals

The Bank of Canada policy rate remains at 2.25 percent, unchanged, reinforcing the view that monetary policy is on hold rather than tightening further. Housing starts printed at approximately 282,000 units on a seasonally adjusted annualized basis. While the month over month number was volatile, the three month trend shows only a 1.1 percent increase, with the six month trend slightly negative. I’m also watching housing starts closely because supply growth, not headline demand, is what ultimately pressures rents and occupancy in markets. These data points suggest stabilization rather than acceleration, which supports my near-term operating assumptions.

Our Strategic Positioning

Based on these indicators, here’s what we are intending to do,

• Prioritize fixed-rate financing with longer duration where the math works, locking in predictability rather than chasing rate timing

• Maintain conservative exit cap assumptions that reflect higher long-term bond yields rather than short-term rate relief

• Focus acquisition efforts on assets with in-place cash flow that remain resilient even if rates stay elevated longer than expected

Macro Context

It is important never to look at real estate in isolation. The TSX is up roughly 30 percent year over year, while the S&P 500 has gained close to 14 percent over the same period. Public real estate has already repriced, with the TSX REIT index up more than 20 percent year over year. These moves reflect improving risk sentiment and easing financial conditions at the margin. For multifamily fundamentals, this backdrop supports steady rental demand, particularly as homeownership affordability remains constrained despite lower short-term rates.

Bottom Line

Overall, we view the current market as balanced but unforgiving. Rates are lower than a year ago at the short end, higher at the long end, financing markets are calm, and supply growth is contained. The opportunity is not in aggressive leverage or optimistic growth assumptions, but in disciplined underwriting and operational execution. This environment rewards patience and precision more than speed.

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.