As we step into 2025, Canada’s housing market finds itself on a cautiously optimistic path. The easing of interest rates, coupled with a resilient economy, has brought stability to the market, reflected in modest gains in home sales and prices. However, challenges such as housing supply and affordability remain at the forefront for policymakers and buyers.
Table of Contents
Here’s a detailed look at the 2025 forecasts for the housing market and interest rates, as projected by economists, analysts, and major real estate organizations.
Canada New Mortgage Refinance Rules Under Secondary Suite Program 2025
Secondary Suite Incentive Program 2025: Affordable Housing Opportunities
$80,000 Canada Secondary Suite Loan Program 2025 with Low interest rate of 2%
The Housing Market: A Closer Look at 2025 Projections
Canadian Real Estate Association (CREA)
- 2025 Home Sales Forecast: 499,816 (+6.6% YoY)
“The market is expected to remain stable in a holding pattern until spring, when a sharper rebound is anticipated. Sales momentum is projected to accelerate starting in Q2 of 2025.” - 2025 Home Price Forecast: $713,375 (+4.4% YoY)
Experts’ Predictions for Canada’s Housing Market in the Coming Year
New Mortgage Rules Take Effect; Additional Changes Expected Soon, Economist Predicts
Canada Real Estate Market Forecast 2024-2029: Steady Growth Amid Changing Interest Rates
Royal LePage
- 2025 Q4 Price Forecast: $856,692 (+6% YoY)
“After years of market volatility, indicators point to stability in 2025. Mortgage lending rule changes and interest rate cuts are bolstering buyer confidence, leading to increased activity,” says CEO Phil Soper.
Re/Max Canada
- 2025 National Average Price Growth: +5% YoY
Re/Max anticipates increased activity in 33 out of 37 surveyed regions, with sales growth reaching up to 25% in some areas.
RBC Economics
- 2025 Home Resales Forecast: 518,400 (+12.5% YoY)
“Sales will continue rising, driven by rate cuts, though affordability challenges will temper growth,” notes RBC. - 2025 Q4 Home Price Forecast: $809,900 (+1.6% YoY)
TD Economics
- 2025 Sales Growth Forecast: +15.8% YoY
- 2025 Price Growth Forecast: +8% YoY
TD attributes the strong outlook to falling borrowing costs, economic growth, and new mortgage rules that will enhance affordability.
Calgary Housing Market Forecast 2024, 2025, 2026 & 2030
Toronto Housing Market Forecast 2025: Trends, Insights, and Predictions
Montreal Housing Market Forecast 2025-2026: Must-Know Trends and Predictions
Interest Rates in 2025: A Gradual Path to Stability
Following significant rate cuts in 2024, the Bank of Canada (BoC) is taking a more measured approach in 2025, with further reductions expected. By mid-2025, the policy rate is forecast to settle between 2.00% and 3.00%, depending on inflation and economic conditions.
Bond yields, key drivers of fixed mortgage rates, are anticipated to stabilize around their current levels of 3.00%, providing much-needed predictability for borrowers.
Survey Reveals 70% of Mortgage Holders Fear Upcoming Renewal
Big 6 Bank Interest Rate & Bond Yield Projections
| Institution | Policy Rate Q4 ’25 | Policy Rate Q4 ’26 | 5-Year Bond Yield Q4 ’25 | 5-Year Bond Yield Q4 ’26 |
|---|---|---|---|---|
| BMO | 2.50% | NA | 2.95% (-10 bps) | 2.75% (+15 bps) |
| National Bank | 2.25% (+25 bps) | 2.85% | 2.90% (+20 bps) | 2.85% |
| RBC | 2.00% | 2.45% (-10 bps) | NA | NA |
| TD | 3.00% | 3.50% (-25 bps) | 2.90% (-10 bps) | 3.50% |
What Borrowers Can Expect in 2025
- Variable-Rate Borrowers: Gradual rate reductions will provide relief, though the pace may slow.
- Fixed-Rate Borrowers: Stability in bond yields means predictable rates for new fixed-rate mortgages.
Affordability Challenges and Housing Supply Issues
Despite positive forecasts, affordability remains a critical concern. Borrowers renewing their mortgages may still face elevated costs, while the supply of homes continues to lag behind demand. Policymakers will need to balance rate cuts and other economic measures to address these systemic issues effectively.
2025: A Year of Stabilization and Cautious Optimism
Canada’s housing market is poised for a measured recovery in 2025, driven by easing interest rates, favorable mortgage rule changes, and a growing backlog of eager buyers. While uncertainties persist, the year ahead offers opportunities for growth and stability, marking a hopeful chapter for homeowners and buyers alike.
Leave a Reply