Canadian Consumer Confidence & Housing Market Insights – January 2025

Kyle Mark *PREC

January 14, 2025 · 3 min read

Two metal gears meshing, one gold and engraved consumer, one silver and engraved confidence

Written in January 2025. Some details have changed since, so check current numbers before you act on this.

📊 Canadian Consumer Confidence & Housing Market Insights – January 2025

Canadian consumer confidence dropped sharply heading into January 2025, and it's already showing up in housing, with many buyers waiting to see what rates and inventory do next. That decline raises questions about the strength of the labour market, mortgage trends and future real estate activity. Below, you'll see what the polling and lending trends say, and what they could mean for you.

🔎 Is Canada Facing a “Vibecession”?

The term "vibecession" refers to a decline in consumer sentiment, even if economic fundamentals aren't fully collapsing. Over the past six weeks, Canadian consumer confidence has dipped sharply:

Concerns about the Economy: Weekly Nanos polling shows that jobs and the economy are now the #1 concern for Canadians, reaching levels not seen since the early days of the pandemic.
Personal Financial Worries: A growing number of respondents feel their financial situation is worse than a year ago, with pessimism at its highest in nearly five years.
Economic Deterioration Expected: The proportion of Canadians anticipating economic decline is rising fast—comparable to the panic during the Bank of Canada’s aggressive rate hikes in mid-2022.

🏦 Mortgage Debt & Lending Trends

Mortgage Growth:
Mortgage debt is climbing at the fastest pace since the Bank of Canada began its rate-hike cycle, and Statistics Canada says household mortgage debt rose 0.5% in October 2024.

HELOC (Home Equity Line of Credit) Balances:
HELOC lending has also surged, with Statistics Canada reporting balances up 0.7% in October 2024. This could point to:

Big-Ticket Purchases: Canadians are tapping into home equity for renovations, vehicles, or vacation properties.
Financial Strain: Others may be borrowing to make ends meet, signaling broader economic challenges.

💸 What’s Happening with Mortgage Rates?

As of January 2025, the Bank of Canada had recently cut its policy rate by 50 basis points, yet fixed and variable mortgage rates hadn't budged significantly. I covered what a rate cut does for you in this earlier post.

5-Year Fixed Rates: Discounts were minimal after the cut, leaving many rates still higher than they were in September.
Variable Rates: While slightly lower, they remain above fixed rates in many cases, making affordability a continued challenge.
Expected Policy Rate Path: Analysts predict the Bank of Canada could cut rates further.

🏠 How Does Low Consumer Confidence Affect the Housing Market?

Mortgage Payments: Despite the recent rate cut, affordability is still stretched. You can run the payment on your own numbers with my mortgage calculator.
Household Debt: Canadians remain some of the most indebted globally, with household debt-to-GDP ratios well above the G20 average. High borrowing costs could exacerbate financial strain unless rates drop significantly.
Real Estate Sentiment: Consumer confidence in the housing market has fallen, with many buyers taking a "wait-and-see" approach as rates and inventory levels shift. The Kyle Mark Report shows the current numbers for your area, free with an account.

🌐 What Does This Mean for Buyers, Sellers, and Investors?

For Buyers: Keep an eye on mortgage trends and start budgeting for future rate cuts. Lower HELOC rates could present an opportunity to renovate or upgrade.
For Sellers: With consumer sentiment low, positioning your property well in the market will be critical. Now is the time to ensure your home stands out. My seller page shows how I do it.
For Investors: This could be the perfect moment to identify undervalued properties. As rates drop and consumer confidence eventually recovers, the market will likely rebound.

📞 Let’s Strategize Together

This year is shaping up to be a dynamic one for the real estate market, with opportunities for those ready to make informed moves. Whether you’re buying, selling, or investing, let’s connect to discuss your goals and create a winning strategy.

🔹 Book your discovery call here: Book a call
🔹 Search Vancouver properties here: Search homes

Here’s to navigating the 2025 real estate market with confidence and success!

Frequently asked questions

What is a vibecession?

A decline in consumer sentiment, even if economic fundamentals aren't fully collapsing.

What happened to mortgage rates after the Bank of Canada's cut?

They didn't budge significantly. Discounts on 5-year fixed rates were minimal, leaving many still higher than they were in September, and variable rates stayed above fixed rates in many cases.

Why are HELOC balances rising in Canada?

Some Canadians may be tapping home equity for renovations, vehicles or vacation properties. Others may be borrowing to make ends meet.