This is for educational purposes only; it does not guarantee future performance or serve as financial or tax advice.
The Bank of Canada just released its July 2025 monetary policy report, and while rates are holding steady for now, a lot is happening behind the scenes that’ll shape where things go next. If you’re thinking of buying or selling real estate in Toronto, here’s a breakdown of what actually matters to you.
Inflation is Still the Main Focus
The Bank of Canada’s main job is keeping inflation around 2%, and that’s exactly where they expect it to land through 2027. There are some short-term pressures pushing prices up—like new tariffs and the end of the temporary carbon tax break. But on the flip side, weaker demand, lower housing costs, and a stronger Canadian dollar are helping to ease inflation.
Bottom line? If inflation stays near 2% or below, the Bank of Canada has room to cut rates. That’s their biggest decision-maker right now.
The Economy is Slowing Down
The economy has been surprisingly resilient, but it’s now slowing. We’ll likely see a small dip in GDP in Q2 2025 (final data drops end of August). Growth for 2025 and 2026 is now expected to be weaker than what the Bank projected back in January.
Job losses are going up, and global trade tensions aren’t helping. On top of that, the Canadian dollar is gaining strength, which is great for importers but bad for Canadian exporters—especially with global demand cooling.
Are Rate Cuts Coming in 2025?
There are three more rate announcements left this year, and more than half of Canada’s big banks now expect cuts to start before the end of 2025. The Bank of Canada won’t make any big moves unless inflation stays low—but they’re watching a mix of factors: GDP growth, job numbers, global risks, and how much Canadians are spending.
While we can’t predict the exact timing, rate cuts are likely coming—but they’ll probably be gradual.
| Bank | Now | Sep 2025 | Year-End 2025 | Year-End 2026 |
|---|---|---|---|---|
| TD (Updated Jun 2025) | 2.75% | 2.25% | 2.25% | 2.25% |
| CIBC (Updated Jul 2025) | 2.75% | 2.50% | 2.25% | 2.25% |
| BMO (Updated Jul 2025) | 2.75% | 2.50% | 2.25% | 2.00% |
| RBC (Updated Jul 2025) | 2.75% | 2.75% | 2.75% | 2.75% |
| Scotia (Updated Jul 2025) | 2.75% | 2.75% | 2.75% | 2.50% |
What This Means for Toronto Real Estate
Even if interest rates drop slightly, don’t expect a major price boom. September usually brings more listings, but buyers don’t always show up at the same pace. This mismatch typically softens prices, especially for stale listings.
So unless there’s a surprise surge in buyer demand, we could see prices dip to the lower end of the range we’ve been in since 2022.
But no, this doesn’t mean a crash. Toronto’s housing market has been bouncing within a range for years—some ups, some downs, but nothing dramatic. We might stay in that pattern through the rest of 2025, with a possible bump in early 2026.
Why This Is a Window of Opportunity
A flat market with soft prices and stable or falling interest rates is a great setup for investors. You can buy smart, lock in solid cash flow, and benefit from future appreciation.
Let’s look at an example: You could buy a semi-detached house in midtown Toronto for under $900K, put in $150K in renos to turn it into a legal triplex, and walk away with over $2,000/month in cash flow. Add a garden suite, and your returns climb even higher.
Yes—Toronto properties can cash flow. You just need to know where to look and how to execute properly.
Ready to Make a Move On A Toronto Multiplex?
We’re not just another sales brokerage. We specialize in helping investors buy, renovate, and manage multiplexes across Toronto. From deal analysis and renovation coaching to property management, we help you get it done right.
Here’s what it looks like when you work with Elevate:
- Strategy Call: We get clear on your goals and walk you through how to invest smart in Toronto. Straight talk, no fluff.
- Property Search & Purchase: We find the right property that fits your plan — whether it’s turnkey or value-add.
- Renovation Guidance: Need renos? We’ve got trusted contractors, and we’ll coach you through the process so you don’t get burned.
- Leasing & Management: Want help renting it out or managing it long-term? Our team’s got that covered too.
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!
