Canadian Real Estate Market Update – Q3 2025

Economic Growth Trends¹

• Canada’s economy contracted by 1.6% annualized in Q2 2025 (latest reading), reversing the prior quarter’s revised 2.0% growth and falling short of expectations
• While the headline figure suggested a soft patch, the underlying story was one of an external drag rather than domestic deterioration
• The decline was driven by a 7.5% drop in exports, the steepest since 2020, as U.S. tariff measures temporarily disrupted trade flows
• Key export categories such as passenger vehicles (-24.7%) and industrial machinery (-18.5%) were hardest hit
• Encouragingly, final domestic demand rose at its fastest pace in a year, buoyed by resilient household consumption and a rebound in public-sector spending
• More recently, preliminary gross domestic product (“GDP”) shows July as the strongest month since January, with August holding steady, signaling stabilization
• Further, corporate inventory builds point to business confidence in improving demand as trade tensions ease
• Overall conditions suggest Canada is well positioned for a growth rebound as external pressures normalize