Welcome to September 2025
You might wonder why I talk about the stock market when as you know, I am not a proponent of investing in the equity markets. Although I do not recommend stock investing, it has always been considered the barometer of the macro economy. Generally, as the stock market goes…so goes the economy…until it does not. When the economy and the stock market start to diverge in growth and retraction it is short lived and one corrects to the other. We will watch this apparent divergence to see which one corrects to the other.
What does this mean for us and our investments? Be cautiously optimistic. Cautious because it is possible that the stock market is over hyped and could correct sharply and have a detrimental effect on the economy. What is more probable is that the stock market is ahead of the economy and we are about to experience a recovery.
Other than GICs we are mainly invested in real estate-based investments and the real estate market is an important asset class for us to keep a close eye on. And here we may be seeing the first signs of a recovery. Any of you listening to the real estate news the past six months has seen a buyer’s market evolve in most regions of Canada. There was significant attention to the negative Toronto condo market. However, Toronto is showing signs of nearing the bottom of the down cycle as sales activity increased in August compared both to the previous month and the previous month a year ago. Still a buyers’ market, but some experts are predicting a recovery in early 2026.
Here are some interesting articles:
Comparison of the buyer’s market in various regions of Canada. Toronto not as bad as the media has made out and Vancouver is still showing more room for value deterioration. Calgary and major prairie cities showing the only sustained growth in the country.
Canada's housing market is set to get cheaper and 5 cities are dropping more than Toronto
Canadian real estate sales show best August in four years. Still down numbers on the ten-year average, still a buyers market, but a rare positive sign in a year of low sales volumes and a stagnant overall market.
September 15 2025 News Release | CREA Statistics
Canadian GDP down 1.6% mainly due to lower exports and lower consumer spending. The result is largely viewed to be a consequence of the tariff uncertainty during the first two quarters and should dissipate the last two quarters.
Canada GDP Growth Annualized
Canada posted a $4.9 billion trade deficit in July, an improvement from the 6 billion deficit in June. Lowest in four months while exports to the US increased by 5.5% mostly due to increased oil exports.
Inflation up to 1.9% from 1.7% in the previous month. Bank of Canada expected to keep inflation at bay while softening monetary policy.
Sincerely,
Norm Holmes | Vice President