Cap rates (property's annual net income divided by purchase price) as a key real estate metric. They cover compression (falling rates, rising prices) and expansion (rising rates, falling prices), showing how small cap rate changes significantly impact property values. They note cap rates typically increase during recessions due to higher perceived risk, financing costs, and lower growth expectations.

• Cap Rate Math Impact: A 2.5% cap rate increase (4% to 6.5%) can cause a 38.5% property value drop, potentially eliminating equity for leveraged investors.
• Recession Patterns: Cap rates rise during downturns as investors require higher returns for increased risk, even when interest rates initially fall.
• Investor Strategy: Savvy investors avoid assuming further cap rate compression and instead stress-test for expansion to ensure investments can withstand market changes.

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Homeownership remains a strong aspiration for many Canadians despite affordability challenges. A Habitat for Humanity/Deloitte study shows significant benefits of ownership versus renting, including income growth and improved health outcomes. Yet, Canada's homeownership rate dropped from 69% (2011) to 66.5% (2021), with young adults particularly affected.

• Strong Desire Despite Challenges: 84% of young Canadians (18-38) believe homeownership is worthwhile despite affordability issues.
• Measurable Benefits: Homeowners experienced 28% higher incomes than comparable renters, with 73% reporting better physical health.
• Declining Accessibility: Homeownership among 25-29 year-olds fell from 44% to 36.5% over a decade.

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The Canadian housing market in May 2025 showed signs of movement but not a dramatic rebound.

National home sales increased by 3.6% month-over-month, primarily driven by Toronto, Calgary, and Ottawa. However, supply is outpacing demand, with new listings up 3.1% and total active listings up 13.2% year-over-year. The market has entered what's being called a "negotiation market" where buyers have more leverage and choices.

• The market is showing increased activity but remains cautious - sales are up but still 4.3% below last year's levels
• Supply is increasing significantly with the sales-to-new listings ratio at 47%, below the 10-year average of 55%
• Prices are stabilizing with the national average at $691,299, down 1.8% from last May, with significant regional variations - Ontario and BC showing declines while Quebec, Manitoba, and Saskatchewan are seeing increases

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