Recent Updates on the Canadian Housing Market
The Canadian Real Estate Association (CREA) has made significant updates to its forecast regarding home sales and average home prices over the next couple of years. This outlook is based on the analysis of the Multiple Listing Service (MLS) systems used by Canadian real estate boards and associations.
Stability in the Forecast
CREA’s latest forecast indicates minimal changes compared to previous predictions. The organization is still relying on the assumption that after more than two years of pent-up demand, combined with lower borrowing costs and a typical increase in spring listings, there will be a resurgence in market activity throughout Canada moving into 2025. This anticipated rebound in the housing market was somewhat hinted at during the last quarter of the prior year.
Economic Factors Influencing Demand
A contributing factor to the expected rebound is the recent decline in mortgage rates. The Bank of Canada may also provide signals that interest rates are nearing their lowest point during the current easing cycle. This could encourage additional buyers who have been holding back, ultimately aiming to secure fixed-rate mortgages while favorable conditions last.
Regional Variations in the Market
The demand recovery is expected to differ depending on the region. For instance, in British Columbia and Ontario, one can anticipate larger rebounds in sales due to current low sales figures and a more significant number of available homes for sale. In these regions, the low sales figures create less chance for price increases since home prices are already high.
Reactions in Alberta and Saskatchewan
Conversely, Alberta and Saskatchewan may experience increased demand primarily reflected in rising property prices. In 2024, sales in these provinces were close to record levels, and current inventory is limited, resulting in prices that are generally more affordable compared to other regions.
Forecast for Manitoba, Quebec, and Atlantic Provinces
Manitoba, Quebec, and the Atlantic provinces are projected to sit somewhere between the two extremes. In these areas, both sales and prices are anticipated to increase in 2025.
Risks Affecting the Outlook
While the potential for a sudden surge in demand due to years of backlog exists, it's important to consider new risks that could alter the landscape. There are growing concerns about a possible trade war with the United States, which might negatively impact the Canadian economy. CREA will continue to monitor these developments and incorporate any pertinent information into future forecasts.
Sales and Price Projections
For the year 2025, around 532,704 residential properties are anticipated to change hands through Canadian MLS systems, marking an 8.6% rise compared to 2024. This adjustment reflects a revision from a prior expectation of only a 6.6% increase, influenced by the unexpected robustness displayed by the market.
Home Price Expectations
The national average home price is predicted to increase by 4.7% year-on-year, reaching $722,221 in 2025, a slight modification from the earlier forecast of a 4.4% gain. Notably, outside of British Columbia and Ontario, several other areas are already witnessing significant price growth.
Looking Ahead to 2026
In 2026, a further increase in national home sales is projected at 4.5%, totaling 556,662 transactions. Additionally, the average national home price is expected to rise by 3.3% from 2025, reaching approximately $746,379.
CREA's Commitment
Each quarter, CREA updates its predictions concerning home sales and average prices using data from MLS systems. The next forecast update is planned for April 2025, providing a more precise outlook as the situation evolves.
About the Canadian Real Estate Association
The Canadian Real Estate Association is one of the largest single-industry associations in Canada, representing over 160,000 REALTORS, all dedicated to enhancing the economic and social fabric of their communities. CREA advocates for the interests of property owners, buyers, and sellers.
Contact Information
For further inquiries, please reach out to Pierre Leduc, Media Relations at CREA. He can be contacted via telephone at 613-237-7111 or 613-884-1460, or through email at pleduc@CREA.ca.
Frequently Asked Questions
What factors are influencing the housing market forecast?
The forecast is influenced by pent-up demand, lower borrowing costs, and anticipated economic conditions, such as mortgage rates and inventory levels.
How will regional markets be affected differently?
Regions like British Columbia and Ontario may see larger sales rebounds, while Alberta and Saskatchewan could anticipate price increases due to limited inventory.
What are the projected home sales for 2025?
Approximately 532,704 residential properties are expected to change hands through Canadian MLS systems in 2025.
What are the average home price predictions?
The national average home price is projected to reach $722,221 in 2025, reflecting a 4.7% increase compared to the previous year.
When will CREA publish its next forecast?
CREA is scheduled to publish its next housing market forecast in April 2025.
