The Big Story Interest rate cuts and more affordable housing: what's the latest on the real estate market?
Sep 22, 2025
In this conversation, Randall Bartlett, Deputy Chief Economist at Desjardins Group, dissects the recent interest rate cuts by the Bank of Canada and the U.S. Federal Reserve. He explains the implications for household savings and rental supply, as well as the unique economic circumstances of both countries. The discussion also dives into recession risks, contrasting the mandates of the Fed and the Bank of Canada, and what the future may hold for the Canadian dollar and real estate market amidst these changes.
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Why The Bank Of Canada Cut Rates
- Randall Bartlett says three main forces prompted the Bank of Canada cut: weak activity, easing underlying inflation, and removal of retaliatory tariffs.
- These combined factors made the September cut easier for policymakers to justify.
Rate Cuts Will Ease Mortgage Renewals
- Bartlett expects rate cuts to give a tailwind to households and the real estate sector, easing pressure from upcoming mortgage renewals.
- He notes proactive household behaviour and lender flexibility have reduced the renewal shock risk to growth.
Uncertainty Holding Buyers Back
- Uncertainty and weak labour markets have kept potential homebuyers sidelined despite higher listings activity.
- Bartlett sees a modest, gradual housing pickup as uncertainty fades and borrowing costs fall.