2025 Outlook: Anticipated Growth in Residential Prices Due to Interest Rate Cuts

Looking forward to 2025, Canadians have a positive outlook on the housing market, thanks in part to recent interest rate cuts. RE/MAX Canada predicts a robust market next year, with the national average home price set to rise by five percent, and sales expected to climb in the majority of regions surveyed, with potential increases up to 25 percent.

In a survey conducted by Leger on behalf of RE/MAX Canada, it was found that first-time homebuyers were feeling particularly optimistic, making up a significant portion of the market activity expected in 2025. This positivity is driven partially by interest rate cuts and changes to mortgage stress tests, offering some relief to prospective buyers.

According to the survey, the majority of Canadians still believe that owning a home is a solid investment, and many are open to exploring new neighborhoods to find more affordable options. Additionally, more people are valuing the expertise of real estate professionals to guide them through the buying or selling process.

Looking at regional market insights, it’s anticipated that many areas will shift towards a sellers’ market in 2025, while others will balance out or lean towards buyers. First-time homebuyers are identified as a key demographic across the nation, with differing preferences in property types based on location.

Heading into 2025, British Columbia and the Prairies are expecting price increases of up to 10 percent in residential properties. Regions like GVA and Victoria in British Columbia are predicting sellers’ markets, while others are expected to have a balanced market. In the Prairies, a mix of balanced and sellers’ markets are expected.

In Ontario, economic conditions are influencing price increases, with Toronto expecting a slight rise in prices and other regions seeing moderate upticks. Overall, the market is expected to favor sellers in many areas, with varying degrees of balance or buyer preference.

In conclusion, the housing market outlook for 2025 is optimistic, with Canadians feeling confident about property ownership and the potential for real estate investment. First-time homebuyers are expected to play a significant role in driving market activity, and various regions across the country are preparing for changes in market dynamics.