Experts say the nation is in or imminently entering a recession that could shake an already vulnerable housing market
As clouds of economic uncertainty gather over Canada, the housing market is bracing for another bout of turbulence. Several economists warn the country may already be in a recession — and the implications for real estate could be profound.
“The real estate industry will be impacted a lot,” said Vik Singh, a professor at Toronto Metropolitan University specializing in housing and economic trends. “The analogy I use is we're in quicksand right now. Instead of panicking we should have a very steady focus on how to get out of this.”
Singh suggested that property investors are poised to feel the weight of an economic slowdown. As financial caution takes hold, discretionary spending on real estate may be one of the first areas trimmed by Canadians.
A recent report by BMO Financial Group, published in May, found that 67% of Canadians plan to delay purchasing a home until borrowing costs begin to decline. The same report revealed that 70% of respondents are increasingly concerned about a recession — a statistic that underscores the current atmosphere of financial restraint.
Kingsley Ma of RE/MAX Canada sees potential in the downturn: lower prices and stable inventory give confident buyers an edge, even as the US-Canada trade war stalls broader housing activity. https://t.co/pCgBAh3674#HomeBuying #REMarketUpdate #MortgageInsights
— Canadian Mortgage Professional Magazine (@CMPmagazine) May 26, 2025
For mortgage professionals like Kyle Green, who runs The Green Mortgage Group, survival in this environment means constantly reassessing operations. “We're in a constant state of… review just to make sure that we keep costs under control,” he said.
Green noted that he adopted this lean approach several years ago. “My marketing budget got cut to almost zero back sometime in 2022,” he explained. That cost-cutting measure has since become a long-term practice.
Despite these constraints, Green remarked that Vancouver, where his business is based, has shown a degree of resilience — likely due to its lower reliance on industries most affected by new tariffs, such as oil and gas. Still, he emphasized that first-time buyers are especially vulnerable to market fears. “They’re more media-driven,” he said, and quick to react to economic headlines.
Glimmers of optimism in a tough climate
While the housing landscape has grown more treacherous, Green remains cautiously optimistic. He believes that interest rate cuts — should they materialize — could open up new opportunities for mortgage professionals and their clients. “Interest rates being where they’re at, it definitely helps us quite a bit.”
Now in his 18th year as a broker, Green has witnessed his share of economic cycles. He maintains that downturns, while painful, often pave the way for transformation. “Some of the best markets that I've ever operated in are actually recessionary markets,” he said. “Interest rates come down, which spurs more activity.”
Urban impact and possible path forward
Singh noted that the consequences of a recession are likely to be most acute in large metropolitan areas, particularly Toronto, where unemployment trends exceed the national average. “It's the younger population [who are] facing the brunt right now,” he said.
Toronto’s condo market, already under scrutiny due to its recent slump, could face further strain as job losses mount among the city’s burgeoning population of first-time homebuyers. Yet Singh points to the unpredictable nature of global trade politics as a wild card.
“We don't know what's going to happen tomorrow with Trump, right? He might wake up and say, ‘Hey, you know what, Canada’s good’,” Singh remarked, referring to the trade tensions sparked by the US administration.
As the market stumbles through its longest slump in recent memory, even seasoned players like Green are feeling the pressure. “I've been through a lot of different ups and downs and all arounds — this has been the most prolonged down cycle that I've ever seen.”
Still, he believes the challenges will leave a lasting impact on the industry, thinning the ranks and forging stronger professionals. “If you can make it in this market, you'll definitely be able to make it in any other type of climate.”
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
