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By Michael J. Allan, RE/MAX Aboutowne Realty Corp., Brokerage

Folks, I've been in this business long enough to know one thing: the market never sends a memo before it changes direction. So I make it my job to keep up. This month I sat in on the September 2026 Mortgage & Economic Outline from Samantha Comito, Managing Partner at Outline Financial. Here's the plain-English version and what it means for buyers, sellers and homeowners from Oakville and Burlington to Hamilton, Niagara and the west GTA.

The Bank of Canada Hit Pause, Again

On September 2, the Bank of Canada held its overnight rate at 2.25% for the seventh meeting in a row. Prime is steady at 4.45%. Governor Macklem said inflation and growth have landed roughly where the Bank expected. He also flagged that the risk of higher inflation has grown, and that new tariffs make the growth picture murkier.

Here's the straight talk: the market doesn't expect the pause to last. As of September 24, bond traders were pricing in:

• A 62% chance of a 0.25% hike at the October 28 meeting

• A near-certain hike by December 9

The Big 6 banks are more measured. Their forecasts put the overnight rate at 2.25% to 2.50% by the end of 2026, and 2.25% to 3.25% by the end of 2027. That's a prime rate somewhere between 4.45% and 5.45%.

Fixed Rates Don't Wait for the Bank of Canada

This is the part many people miss. Variable rates move when the Bank of Canada moves. Fixed rates follow the 5-year Government of Canada bond yield, and that yield has been on a tear.

• On February 27, the day before the US–Iran conflict began, the 5-year yield sat at 2.67%.

• By September 18, it had climbed to 3.59%, a jump of 0.92%.

Oil shocks, inflation fears, a US Federal Reserve that hiked rates on September 16, and our own trade headaches have all pushed borrowing costs up. Canada's bond market is global, and when the world sells bonds, we feel it here.

The Big 3: GDP, Jobs and Inflation

• GDP: The economy grew 3.3% annualized in Q2, led by a strong rebound in exports. Q1 was revised up to +0.3%, which takes "technical recession" off the table.

• Jobs: August was a gut punch. Canada lost 41,700 jobs, when forecasters expected a gain of 15,000. Wage growth slowed to 2.0%, the slowest since 2017 outside the pandemic.

• Inflation: Headline inflation is 3.0%, but gasoline is doing much of the heavy lifting. Gas prices were up nearly 23% year over year. Strip gas out and inflation is 2.4%, and the Bank's preferred core measures sit around 2%, which is right on target.

So we have mixed signals. The job market is cooling, which argues for steady or lower rates. Energy prices and tariffs are pushing the other way.

The Trade War Is Back

It's been a rough summer on the Canada–US front:

• July 1: CUSMA was not renewed at the joint review.

• August 21–22: Talks collapsed, and the US slapped 50% tariffs on about $27B of Canadian goods, including building materials.

• August 24: The US threatened to double auto tariffs to 50% on January 1.

• September 8: Canada retaliated dollar-for-dollar.

The base case shaves about half a point off GDP. A worse escalation could push us toward recession, and Ontario is among the most exposed provinces. Tariffs on building materials don't help construction costs either.

Housing Supply and Demand: The Long Game Hasn't Changed

• Ontario's population actually shrank: it fell by 152,648 year over year as of Q1 2026. That's the first decline in more than 70 years, driven by far fewer non-permanent residents. Economists see this as a temporary shift.

• Even so, a new Urbanation/FRPO study projects a 121,000-unit rental shortage in Ontario by 2036, on top of a 249,000-unit deficit built up since 2016.

• CMHC says Canada's housing supply gap is essentially unchanged, and that we need both more homes and the right kind of homes.

In the short term, demand has cooled. In the long term, we still aren't building enough. As I've always said, buy land, they're not making any more of it.

What This Means for You

Buyers: If you're planning a purchase in the next few months, get a pre-approval with a rate hold now. A hold protects you if rates rise, and you still benefit if they fall. It's cheap insurance.

Sellers: A cooler population picture means buyers are more rate-sensitive and more selective. Pricing it right and presenting it well matter more than ever. The good news is that long-term supply shortages still support values.

Homeowners with a renewal coming up: Don't wait for the renewal letter to show up in your mailbox. Start the conversation 4–6 months early, and have a mortgage professional run the fixed-versus-variable numbers for your situation.

Investors: Short-term rental demand has softened, but the 10-year shortage story is still firmly intact.

Dates to Circle on the Calendar

• Sept 29: Canadian GDP (monthly)

• Oct 9: Canadian jobs report

• Oct 19: Canadian inflation (CPI)

• Oct 28: Bank of Canada and US Fed rate announcements

• Dec 9: Bank of Canada's final decision of 2026

The Bottom Line

Nobody has a crystal ball, and anyone who tells you otherwise is selling something. What you can do is plan with good information, protect yourself with a rate hold, and work with people who keep their ear to the ground. That's how it's always been done, and it still works.

Thinking about buying, selling or just want to talk strategy? Let's grab a coffee. That's the best move you can make.

Michael J. Allan
RE/MAX Aboutowne Realty Corp., Brokerage
📞 (289) 952-1201 | ✉️ mikefromremax@gmail.com | 🌐 www.michaeljallan.com

Source: Mortgage & Economic Outline, September 2026, presented by Samantha Comito, Outline Financial (FSRA #13151). Market forecasts change daily. This post is for general information only and is not mortgage or financial advice. Please speak with a licensed mortgage professional about your specific situation.

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