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Bank of Canada Holds Rates in June 2025 — But a Cut Could Be Closer Than You Think
The Bank of Canada just announced its June 2025 rate decision — and as expected, they held the overnight rate steady at 2.75%.
Markets weren’t shocked. After the stronger-than-expected GDP growth in Q1, odds of a June cut had already dropped to just 22%. But here’s what really matters: this wasn’t a hawkish hold. In fact, it’s looking more like a pause before more cuts.
Why This Hold Still Signals Weakness
Under the surface, cracks are forming. Sure, GDP came in hot — but a lot of that strength was temporary. Export gains ahead of U.S. tariffs, some one-off business investment spikes, and oil growth masked the slowdown we’re already seeing in:
Household spending
Residential investment
Resale real estate activity (which just saw its biggest drop since early 2022)
The Bank of Canada has acknowledged that Q2 growth is expected to slow even more. Add to that the fact that core inflation is hovering between 2–3%, and there’s not much standing in the way of more rate cuts.
The big banks agree — most are now forecasting at least two more cuts before year-end, with odds of a July rate cut now over 90%.
A Mixed Economy, But the Path Is Clear
Yes, Q1 growth came in stronger than expected — mostly due to export gains and business investment. But under the surface, things are cooling:
Household spending is slowing
Residential real estate activity in Toronto just saw its biggest drop since 2022
Core inflation is sticky but trending down between 2–3%, right in the Bank’s target range
The Bank of Canada held steady in June, but they’ve made it clear: more easing is on the table. That’s supportive for Toronto buyers and investors watching closely.
What This Means for Toronto Real Estate Investors
Right now, Toronto’s housing market is firmly a buyer’s market. There are plenty of listings, lower demand, and buyers have strong negotiation power.
Prices have dropped over 20% from their peak, making it tempting for some to wait for a crash similar to the 1990s. But based on today’s conditions, a 30% crash is unlikely, and here’s why:
1. Housing Supply Is Much Tighter Than the ’90s
Back in the 1990s, there were far more homes and fewer buyers. Today, Toronto faces a housing crisis with very limited supply. You often have to tear down a house before building another. The city is actively encouraging more multiplexes, fourplexes, and backyard houses to increase supply. Starting mid-June, Toronto may allow sixplexes by right — signalling urgent need for more housing, but supply still isn’t keeping up.
2. Sellers Are Not Under Severe Pressure
Mortgage rates sit around 4%, which is manageable for most homeowners. Banks are working with borrowers to avoid forced sales or power-of-sale situations. As a result, there is no flood of distressed sales hitting the market.
3. Inflation Keeps Construction Costs High
Labour and material costs remain expensive, which keeps building costs elevated and supports home prices by preventing them from falling too far.
4. The Market Correction Has Already Happened
The 20% price drop from the peak was a market pullback from the frothy 2021–2022 period. While condos have been weaker, freehold homes still see real demand from end users. Prices have largely stabilized over the past two years where fundamentals are strong.
5. Rate Cuts Are Coming This Time
Unlike the 1990s when interest rates stayed stuck in double digits, today rates have already peaked and are dropping in the lower single digits. The expected two rate cuts by the end of 2025 will improve affordability and buyer confidence further.
6. Trade Tariff Uncertainty Is Easing
While economic uncertainty remains, particularly around tariffs, signs point to resolution soon, reducing one major risk factor.
What Smart Toronto Investors Are Doing Right Now
If you’re serious about investing, here’s the truth: waiting for the “perfect moment” often means missing the best ones.
Right now, deals are starting to pencil out again. We’re seeing turnkey duplexes under $800K generating $700/month in cash flow from day one. Back in 2022, that would’ve been impossible.
The best opportunities show up when things feel uncertain — not when the headlines say the market is hot again. And by the time you get that confirmation, it’s already too late.
Want to Know What the Numbers Look Like Today?
Whether you’re looking for a move-in ready duplex or want to convert a single-family home into a legal multi-unit rental, we’ve got you covered.
At Elevate Realty, we’re not just agents — we’re investors too. Our team is actively buying in this market, and we’ll help you build a strategy that works in today’s environment.
Here’s how it works when you start with us:
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Initial Consultation: We get to know your goals and teach you how to invest smart in Toronto real estate. No fluff, just facts.
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Market Search & Purchase: We dig through the market to find the right property for you.
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Renovation Support: Need renos? Our trusted contractors are ready, and we’ll coach you through managing the work.
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Leasing and Management: Need help renting and managing? Our team has you covered.
Want to see what’s possible for you? Book a strategy session with us here.
What Toronto Real Estate Investment Is Right For You?
Check out our complete Toronto real estate investment guide for all the details and real-life examples. If you’re ready to dive in, just book a call with us!
