Fall Forecast: Interest Rates, Investment Moves & Real Estate Trends for Q4 2025
As Q4 kicks off, Canadian homeowners and investors are facing a market that’s more complex than ever. We gathered our team —mortgage strategist Paul Davidescu, financial advisor Alex Walford, and realtor Alex Dunbar—to decode the latest shifts in housing, interest rates, and stock market performance.
Whether you're buying your first home, repositioning an investment property, or navigating a volatile portfolio, here’s what you need to know heading into the end of 2025.
Housing Market Update: What Rising Fall Inventory Could Mean for 2025
Fraser Valley Realtor Alex Dunbar says one of the most important stories in real estate right now isn’t about interest rates or prices—it’s about inventory.
“We hit peak inventory levels this year—the highest in roughly 15 years. It dipped slightly mid-year, but started climbing again in September. What’s interesting is that inventory normally falls heading into October, November, and December. If we keep seeing it rise into year-end, that’s usually not a great sign for what’s to come next year.”
Where the Activity Is
Demand continues to focus on entry-level price points, but it varies by property type and submarket:
Detached homes: The busiest segment is under $1.3M in the Fraser Valley, especially in Surrey, Langley, and Maple Ridge. In areas like Aldergrove or Maple Ridge, activity picks up even lower than that.
Townhomes: Strongest interest sits around the $800K mark, with activity ramping up quickly as prices drop below $750K or $700K.
Condos: The market remains slower overall, but two-bedrooms under $600K and one-bedrooms under $450K still see movement. In contrast, high-supply areas like Surrey Central and Whalley continue to face softer demand.
Migration and Economic Shifts
Migration patterns are also shifting. Dunbar notes that fewer high-income earners and skilled professionals are moving into the Lower Mainland—and some are actually leaving.
“We’re seeing more clients in tech, IT, and software move south to the U.S.—often to Seattle—because they can earn significantly more with lower taxes. A few years ago, the flow was the opposite.”
Investor Reality Check
Investment opportunities are slowly improving, but it’s a mixed picture. Prices and interest rates have both eased slightly—a rare combination—but rent levels have also declined 5-10% from their peaks in several local markets and even more significantly in others (upwards of 20%).
“Many investors are realizing this when their tenant moves out and they try to re-rent. Suddenly they’re competing with 10 other similar listings, all priced lower,” Dunbar says.
While the numbers can start to make sense in select areas, rental investors now need to be more strategic—understanding that B.C.’s market is primarily equity and appreciation-driven, not cash-flow-driven.
Buyer Leverage and Seller Mindset
Longer average days on market and higher inventory levels are giving buyers a bit more leverage than last year, though this isn’t a distressed market.
“Some sellers are under financial stress, but that’s still a small share of the market. What we are seeing is that sellers are finally adjusting to new price realities. The listings that are either fully renovated or very well-priced are still selling fast. Testing the market just doesn’t work right now. If your home isn’t a 10 out of 10 in presentation, it has to be a 10 out of 10 in price.”
Interest Rates: Mortgage strategy amid expected cuts
Paul Davidescu, founder of Level Up Mortgages, sees opportunity for variable-rate clients:
“We’ve already had one rate cut, and markets are pricing in another in Q1 2026. That makes it a good time to review your mortgage term—especially if you’re sitting variable.”
Canadian Investors Hit Yet Again? Stricter Rental Income Qualifications in 2026
Effective 2026, there are rumours that lenders can no longer “double-count” rental or employment income when qualifying borrowers for multiple investment properties - this is still being confirmed.
As it may stand, investors must now prove that income used to qualify for one property isn’t reused for another, limiting their borrowing power. Properties relying on rental income for more than 50% of qualification may be flagged as “income-producing,” triggering stricter approval terms. This change especially impacts small investors growing from one to two or three rental units. For example, a Vancouver tech worker who owns a condo in Kelowna and wants to buy a second in Nanaimo may now be declined—even with good credit—unless they increase their down payment or reduce debt.
Stock Market Moves: “Canada’s value plays are finally showing up”
Alex Walford, financial advisor and portfolio strategist, shared his equity outlook:
“For the first time in a while, the TSX is outperforming the S&P 500—and it’s not just because the U.S. is cooling. It’s our materials and gold exposure.”
He emphasized a few shifts for Canadian investors to watch:
TSX is leading YTD, buoyed by mining, energy, and defensive sectors.
Many clients are reallocating conservatively, “especially as U.S. growth equities show more volatility.”
“Now’s not the time to chase returns,” Walford says. “It’s about rebalancing intentionally—and remembering that cashflow beats hype in shaky markets.”
Top FAQs for Fall 2025 Homeowners & Investors
Q: Will rates drop again this year?
Probably not until Q1 2026. The BoC is likely to stay cautious for the rest of 2025, but variable-rate clients should already be seeing lower payments.
Q: Is now a good time to buy real estate in BC?
Yes—for primary buyers who find value and negotiate. Investors should focus on specific upside (e.g. laneway potential, mid-term zoning, etc.).
Q: Are U.S. job markets pulling Canadians south?
Yes. Especially in tech, healthcare, and remote-first roles, we’re seeing more homeowners sell in Canada to relocate and reduce their burn rate.
Q: What parts of Canada have better cash flow?
Kamloops, Vernon, and select areas of Vancouver Island are seeing decent long-term rental yields—but financing terms and maintenance must be optimized.
Q: Where are stock market returns headed?
In Canada, expect steadier value-led growth. Avoid overexposure to U.S. growth equities without hedging volatility.
BOTTOM LINE
As 2025 winds down, the message is clear: stay informed, stay flexible, and think long-term. Whether in real estate, mortgages, or markets, those who adapt early to shifting conditions will set themselves up for the strongest start to 2026.
Level Up Mortgages is a mortgage broker team focused on helping the self employed, new immigrants, non-residents, and investors, access best rate and alternative lending in Canada. We have been nominated for best up and coming broker in Canada in 2021 and have been on CTV News and various publications because of our education-first approach to helping you always stay a step ahead of the process. Reach out to us for access to our first-time buyer course or a mortgage strategy session.
See What You Qualify For Or Contact Paul To Get Your Pre-Approval.
Paul Davidescu (www.levelupmortgages.com)
Level Up Mortgages
604-809-3188
paul(at)levelupmortgages.com
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