Ontario brokers warn “status quo” rate call will deepen Canada’s housing slowdown
The Bank of Canada’s decision to hold its policy rate at 2.25% on January 28 kept borrowing costs unchanged but sharpened frustration among Ontario mortgage brokers who said the central bank missed a critical chance to shore up a weakening housing market.
The Canadian Mortgage Brokers Association of Ontario (CMBA Ontario) said the hold undercut federal efforts to boost housing supply and left consumers facing higher borrowing costs just as new-home construction and sales faltered across the province.
The group argued that with new federal housing initiatives on the table, a modest cut would have reinforced confidence that policymakers were aligned on reviving supply and demand.
“We were looking for the Bank of Canada to take a more active role on this,” said Michelle Campbell, president of CMBA Ontario.
“A rate cut would have been a clear indicator for all those concerned that the future of the housing market in Canada will be healthy, regardless of what is happening elsewhere.”
CMBA Ontario highlighted a steep slide in new construction and sales, especially in the Greater Toronto Area, as evidence that today’s interest-rate level became a drag rather than a stabilizer.
New home sales in the Greater Toronto Area sank to a record low in 2025, capping the weakest year in 45 years of data and deepening concerns that today’s slowdown would hollow out construction jobs and future housing supply.https://t.co/1uAtDSK4VA
— Canadian Mortgage Professional Magazine (@CMPmagazine) January 27, 2026
Just 240 new home sales were recorded across the GTA in December 2025, 82% below the 10‑year average. That's the weakest year for new-home sales in 45 years, raising alarms about construction employment.
Outside CMBA Ontario, industry groups have warned that record-low sales volumes could put tens of thousands of housing-related jobs at risk if the downturn persisted.
At current borrowing costs, the association said, “the increased costs of taking on new debt are a disincentive to both suppliers and buyers of housing.”
The result, it argued, has been “a double negative effect” that squeezed new supply while keeping mortgage payments high for existing owners and dampening hiring and investment across the broader economy.
“High interest rates affect all Ontarians, regardless of whether you have a mortgage or not,” Campbell said.
“This isn’t something limited to housing, it’s big-picture issue that affects the whole country. A rate cut would not only have had a positive impact in terms of encouraging new supply and solidifying consumer confidence in the housing market, but would also have had a positive ripple effect, sparking economic growth Canada-wide.”
Brokers’ concerns align with a wider debate over how long the BoC should keep policy on hold after a series of cuts through 2025.
The central bank has emphasized trade uncertainty, sticky inflation and a soft but not collapsing economy in justifying recent pauses, even as national home sales and prices have cooled and renewal pressures have intensified for borrowers.
Recent commentary from major banks has signalled expectations for a prolonged plateau around 2.25%, not an imminent easing cycle.
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