For example, a home priced at 800k would need to yield a minimum rent of $53,600 a year ($4,467 a month) to be considered a favourable investment.
BMO explains that Canada’s late great property bubble was fueled by a rare confluence of record immigration, pandemic migration, excess liquidity, ultra-low rates, maxed-out valuations, and—most importantly—speculative market psychology. None of that is likely to return in the near future.
You fucking idiots that voted Liberal and NDP caused all of this. You killed Canada because you are parasites and voted Liberal because they gave you money for nothing.
October 14, 2025 | Real Estate Bust Has Legs
Danielle Park
The Canadian housing bubble has been deflating since February 2022, and there’s room for it to run.
We highlighted the mania and frenzy of financially destructive behaviours in real time, noting that once bubbles pop, property prices typically take years to recover.
BMO Senior Economist Robert Kavcic apparently agrees. In a recent note highlighted on Better Dwelling.com, Kravcic observes that “While many are searching for bubbles in the equity market, one continues to undo itself as we speak—Canadian real estate… We’ll reiterate, as we have from the start, that this cycle will be measured in years, not months or quarters.”
Kavcic notes that the current nominal home price decline, led by Ontario (in dark blue below), is tracking the 1990s Ontario-led bust (light blue below), and US price trends after the 2007 bubble burst (in orange). 
If prices continue this trajectory, it could take another 5 years to recover the levels seen in 2022. Kravcic adds: “The bear market in housing staggers on until affordability and investment dynamics reset themselves.”
We aren’t there yet. Any homeowner who is struggling today and considering options, or anyone who is thinking of buying, would be wise to consider long-standing affordability norms:
- An ‘affordable’ home price has long been considered 3 times the pretax household income.
Even though the median Canadian home sale price in July ($673k) was 20% lower than the $840k in February 2022, it remains more than 7.2x the median pretax household income nationally of $93k. In major centers like the Greater Toronto and Vancouver areas, the median home price is still more than 11 times and 14 times the median household income.
- Affordable shelter costs (rent or mortgage payment, utilities, taxes, insurance and maintenance costs) are less than 30% of pretax household income.
For example, affordable shelter costs (rent or mortgage, utilities, taxes, insurance, and maintenance) for a household that earns 100k annually pretax would be 30k a year (2500/month).
- From an investor’s perspective, annual rents that yield more than 6.7% of the home price.
For example, a home priced at 800k would need to yield a minimum rent of $53,600 a year ($4,467 a month) to be considered a favourable investment.
BMO explains that Canada’s late great property bubble was fueled by a rare confluence of record immigration, pandemic migration, excess liquidity, ultra-low rates, maxed-out valuations, and—most importantly—speculative market psychology. None of that is likely to return in the near future. |
