As policymakers focus on tariffs, bursting real estate bubbles pose a significantly larger threat in terms of relative economic impact, and that’s now happening in several major economies simultaneously. Homes are the foundation of the household balance sheet and assets in the banking system.
A 2025 Bank of Montreal report, “A Long Way Home”, concurs with our analysis that Canada’s current real estate downturn—often a bellwether for broader North American housing trends—is the most significant since the 1980s correction that lasted six years from peak to trough. Given the still-persistent lack of affordability, the current housing downturn, which began in February 2022, could last longer than most expect.
Canada lost 40,800 jobs in July—the most significant decline since January 2022—and just over half of those lost were in construction (–22,000).
The ongoing housing downturn is the biggest story, and it’s getting little coverage. No doubt, there is financial pain unfolding, but longer-term, much lower home prices are a massive part of the economic rebalancing and revitalization needed.
Vancouver developers are sitting on roughly 13,000 unsold condos, a record high. This is up from roughly 5000 units during the pandemic era. No wise developer is going to start new projects until this backlog clears, hence the cries for removing the foreign buyer ban. There were just 1300 condos sold in the Toronto Real Estate market in Q2, Urbanation calls it a collapse. Rental construction surging in Calgary which will push rents lower. Here is a direct video link.
Similar trends are unfolding in major American centers, too.
Condo prices are dropping across the U.S. as HOA fees skyrocket and condo owners look to sell before the drop gets worse. Condo prices are now down over 20% in markets such as Oakland, Austin, and St. Petersburg, and now they’re even dropping in Nashville. Access condo and rental market data at www.reventure.app. Could this condo correction be a signal of an impending housing market downturn? And when will it be a good time to buy a condo? In a market like Nashville, the rents for apartments are well below the cost of buying a condo, suggesting that the downturn will continue. The last time we saw condo inventory this high on the U.S. Condo Market was 2011, the end of the last housing market downturn. Here is a direct video link.