The Greater Toronto Area housing market can breathe a collective sigh of relief – for now. New data reveals that Canada narrowly avoided a technical recession in the third quarter of 2025, posting a surprising 2.6% annualized growth. This positive GDP figure, released by Statistics Canada, significantly strengthens the odds that the Bank of Canada will hold steady on interest rates at its upcoming December 10th meeting.
While the headline number is encouraging, a closer look reveals some nuances. The growth was largely driven by increased defence spending and a boost to net exports. Business spending remained sluggish, and Q2 GDP was revised downwards to a 1.8% decline. Furthermore, Statistics Canada cautioned that the Q3 figures could be subject to significant revisions due to data collection challenges stemming from the US government shutdown.
Despite these caveats, the news is generally positive for the GTA real estate sector. The expectation of stable interest rates provides much-needed stability and predictability for both buyers and sellers. Rising interest rates have been a major headwind for the market in recent years, so any indication that they are plateauing is welcomed. BMO Chief Economist Doug Porter noted that this GDP result should “quash recession chatter for now,” further bolstering confidence.
Interestingly, StatCan also revised its growth estimates upwards for the years 2022-2024, suggesting that the Canadian economy performed better than initially believed. This positive revision could translate to increased consumer confidence and investment in the housing market in the long term. While the GTA real estate market isn’t out of the woods yet, this latest economic data provides a much-needed shot in the arm and signals a potential period of stability ahead.
Keep an eye on the Bank of Canada’s December announcement for the final word on interest rates and its potential impact on your real estate decisions.
