“Bo-ring!” That’s the direct reply from Shaun Cathcart, Canadian Real Estate Association’s (CREA) Director and Senior Economist of Housing Data and Market Analysis, when asked about what national trends we saw across the Canadian real estate market in 2024. In short, 2024 may have been rather uninspired, but 2025 could paint a very different picture.
While it’s nearly impossible to predict the future (though wouldn’t that be nice!), Cathcart suggests any fluctuations in the Canadian economy, new mortgage rules, and even the changing political landscape following the election in the United States, will all play a role in dictating the Canadian housing market over the months to come.
Cathcart adds that for the past six months, prices are the flattest they have been in recorded history. Here, however, is why he thinks that change may be just around the corner.
Canadian housing markets in 2025
While the national trends from 2024 were flat, the market, on a national level, was not completely dead — just more or so stagnant. Cathcart believes British Columbia and Ontario are holding back national numbers, whereas there’s some movement in other parts of the country such as the Prairies, Quebec, and the Maritime provinces. There was a slight bounce in supply in September, and a slight bounce in October sales, but Cathcart doesn’t expect that to lead to the market resurgence just yet.
In Cathcart’s view, the big jump will likely come in the spring. With interest rates continuing to fall, those who have been sitting on the sidelines, or competing in the rental market, may now take the plunge into making their home purchase. Fixed-rate mortgages are also likely to stabilize around that time, giving new buyers some great financial products to choose from.
This market surge may look different in different parts of the country. In Alberta, for example, demand has already been high and properties are seeing multiple offer scenarios already, so pressure on that market is likely to increase. Ontario and British Columbia currently have lots of inventory, but that may change as well if there is a new wave of buyers entering the market.
Yet the trends aside, there is one other change coming to those lending products that may move the needle more significantly than any other factor.
The mortgage rules are a-changin’
When the current mortgage rules first came into play over a decade ago, they were intended to effectively save young people from their own spending. It was deemed financially irresponsible for young millennials to buy a ‘million dollar mansion’ at a time when the price of a starter home was roughly $400,000. Today, it’s nearly impossible to find that same starter home in Toronto for under $1.1 million.
To that effect, the Government of Canada announced two key changes that took effect on December 15, 2024. The first is that the $1 million price cap for insured mortgages has been raised to $1.5 million — the first adjustment to that mortgage cap since 2012. The other component is 30-year amortization periods are now available to all first-time home buyers and buyers of new builds.
As Cathcart explains, the change in cap means new buyers can not only access more affordable mortgages, but they’ll be paying a fraction of what they were previously for down payments. For example, a two-storey home in Victoria, British Columbia, that would have previously required a $250,000 down payment, may only need a $100,000 down payment today. A former $100,000 down payment in Toronto will now be reduced to $75,000.
The difference is sizable, and it may encourage buyers who previously thought buying wasn’t possible. Unless they were receiving parental or family support with a down payment, young working professionals often struggled under the old mortgage rules. Yet while a young person or couple may not have been able to handle $100,000 on their own, $75,000 may present a lower barrier to entry.
The great unknowns
While forecasting provides some clarity, there are still great unknowns. The American election, for example, may have a significant impact on the Canadian economy depending on how quickly the incoming Trump administration implements any of the proposed tariffs announced in late November. The Bank of Canada may continue gradually cutting interest rates, but given some of the latest economic reports “we’re still 100 basis points too high,” Cathcart added.
One thing is for certain: as buyers enter the market in droves, the work of a REALTOR® will never be more important. REALTORS® can be instrumental in guiding new buyers through the buying process, and helping them navigate markets that they may have dismissed as inaccessible only a few months ago. The market may be unpredictable, but your REALTOR® will always be the first and best resource for your buying and selling journey.
— REALTOR.ca