Canadian Housing Market Update: June 2025 Sees Sales Rise and Prices Stabilize

The Canadian housing market may be turning a corner as recent data from June 2025 shows a 2.8% increase in home sales and a stabilization of housing prices. After a challenging start to the year, these positive trends suggest renewed momentum in the real estate sector, offering hope for buyers, sellers, and industry professionals alike.

Home Sales Rebound, Led by the GTA

According to the latest figures, home sales across Canadian MLS® Systems rose for the second consecutive month, building on a 3.5% gain in May. The recovery has been particularly strong in the Greater Toronto Area (GTA), where transactions have rebounded by a cumulative 17.3% since April. While sales volumes remain below historical averages, this uptick signals growing confidence in the Canadian housing market.

Supply and Demand: New Listings Decline

On the supply side, new listings declined by 2.9% month-over-month in June. With sales rising and fewer new properties coming to market, the national sales-to-new-listings ratio increased to 50.1%, up from 47.3% in May. This ratio remains within the range considered balanced for the Canadian real estate market, indicating neither buyers nor sellers have a clear advantage.

Housing Prices Hold Steady

The National Composite MLS® Home Price Index (HPI) was virtually unchanged from May to June 2025, following several months of modest declines earlier in the year. Year-over-year, the HPI is down 3.7% compared to June 2024, but the pace of decline is expected to slow as the market stabilizes. These trends suggest that housing prices are flattening, providing a more predictable environment for both buyers and sellers.

Economic Insights: Tariffs, Interest Rates, and Mortgage Trends

• Tariff Uncertainty: Ongoing tariff threats, including a recent 35% tariff proposal from Washington, have impacted buyer sentiment and contributed to market caution.
• Interest Rates: The Bank of Canada has held off on further rate cuts, and longer-term interest rates have been trending higher since March. The five-year government bond yield recently surpassed 3%, which could lead to higher fixed mortgage rates.
• Inflation: Core inflation continues to rise, reducing the likelihood of near-term monetary easing and adding to the uncertainty in the housing market.

Outlook for Summer and Fall 2025

Looking ahead, most Canadian housing markets are expected to see increased activity through the summer and into the fall, especially if economic uncertainty subsides. However, ongoing policy changes, interest rate movements, and global economic factors will continue to shape the market. Buyers and sellers should stay informed and work with real estate professionals to navigate these evolving conditions.

Source: Dominion Lending Centres Economic Insights, July 15, 2025.

🏉 Grow the Game Campaign – Rugby Fee Referral Bonus! 🏡

Supporting local rugby while helping families secure the right mortgage? That’s what my Grow the Game Campaign is all about!

🔹 How It Works:
If you complete a mortgage transaction with me—whether it’s a purchase, refinance, or renewal—I’ll reimburse your child’s rugby registration fee.

No kids in rugby? No problem! I’ll donate the equivalent amount to your club’s junior rugby fund to help cover travel or equipment costs for young players.

Mortgage not up for renewal this season? Refer a family member, a friend, a colleague, or a neighbour and you can still secure your reimbursed registration fee!

🔹 Why?
Because I believe in giving back to the sport and the community that helped shape me. Whether on the field or in finance, teamwork and support make all the difference.

💬 Interested in learning more? Let’s chat about how we can grow the game—one mortgage at a time! Click the link below and we can connect!

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Getting approved for a mortgage is a significant milestone on the path to homeownership. Understanding what lenders look for can help you prepare and improve your chances of securing a mortgage with favorable terms. Here’s a comprehensive guide to the key factors that influence mortgage approval in Canada.

1. Income and Employment History: Stability Matters
Lenders will scrutinize your income and employment history to ensure you can afford the mortgage payments. A stable employment history with a steady income is favorable. If you’re self-employed, be prepared to provide additional documentation to prove your income stability.

2. Debt Servicing Ratios: GDS and TDS Explained
Gross Debt Servicing (GDS): This ratio compares your housing costs (mortgage payments, property taxes, heating costs, and 50% of condo fees, if applicable) to your gross monthly income. Ideally, your GDS ratio should be 39% or less.
Total Debt Servicing (TDS): This ratio includes all your monthly debt obligations (housing costs, car payments, credit card payments, loans, etc.) compared to your gross monthly income. Lenders typically prefer a TDS ratio of 44% or less.

By assessing both GDS and TDS ratios, lenders get a comprehensive view of your financial health and ability to manage additional debt.

Disclaimer: While these are the ideal ratios, there are alternative solutions available if your ratios are higher. Reach out to me, and we can do our best to find a solution that works for your unique financial situation.

3. Credit Score: Your Financial Report Card
Your credit score is one of the most crucial elements in the mortgage approval process. It reflects your creditworthiness and is a major determinant of the interest rate you’ll be offered. Generally, a higher credit score leads to better mortgage rates and terms. Aim to maintain a healthy credit score by paying your bills on time, keeping your credit card balances low, and avoiding excessive new credit applications.

4. Down Payment: The Larger, the Better
The minimum down payment in Canada varies based on the purchase price of the home:
– 5% for homes up to $500,000
– 10% for the portion of the home price between $500,000 and $999,999
– 20% for homes priced at $1,000,000 or more

A larger down payment can improve your approval chances and reduce your mortgage insurance premiums.

5. Property Appraisal: Ensuring Value
An appraisal ensures that the property’s value aligns with the purchase price. Most lenders require a property appraisal to confirm that the property is worth the amount you’re borrowing.

6. Mortgage Stress Test: Can You Handle Higher Rates?
The mortgage stress test ensures you can afford payments at a higher interest rate. It uses the Bank of Canada’s qualifying rate or your contract rate plus 2%, whichever is higher. This helps safeguard against future interest rate increases.

7. Documentation: Be Prepared
Prepare to provide various documents, including:
– Proof of income (pay stubs, employment letters)
– Proof of down payment (bank statements, gift letters)
– Credit history (credit report)
– Identification (ID, SIN number)
– Details of current debts (loan statements, credit card statements)

Having these documents ready can expedite the approval process.

8. Financial History: Clean Slate
Lenders may review your financial history for bankruptcies or other financial red flags. A clean financial history boosts your approval chances.

9. Other Considerations: Co-signer and Pre-approval
– Co-signer: If you have a low credit score or insufficient income, a co-signer might help with approval.
– Pre-approval: Getting pre-approved helps you understand how much you can afford and shows sellers you’re a serious buyer.

Understanding these aspects and preparing accordingly can significantly improve your chances of getting approved for a mortgage in Canada. By maintaining a healthy credit score, ensuring stable income, managing your debts, and saving diligently, you can navigate the mortgage approval process with confidence and ease. Ready to take the next step towards homeownership? Start preparing today!

For personalized mortgage advice or to discuss your options, feel free to reach out to me. Let’s make your dream home a reality!

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🏛️DLC The Mortgage Source Independently Owned and Operated FSRA#10145

📞 613-789-8859

📬 ckeys@dominionlending.com