Canadian Housing Market Poised for 5% Growth in 2025: RE/MAX Report

Toronto, ON — Following a series of interest rate cuts in late 2024, the Canadian housing market is set to gain momentum

in 2025, according to a new report by RE/MAX Canada. The real estate organization predicts a national average residential price increase of 5% and a rise in sales across 33 of 37 regions surveyed, with some regions expecting sales to climb as high as 25%.

The renewed confidence is bolstered by first-time homebuyers, identified as the key demographic driving market activity in 81% of surveyed regions. Despite ongoing affordability concerns, improved conditions such as changes to the mortgage stress test and lower rates are encouraging prospective buyers.

“While affordability challenges persist, the sequential interest rate cuts and changes to the mortgage stress test are a much-needed reprieve for those looking to get into the market,” said Christopher Alexander, President of RE/MAX Canada.

Shifting Regional Dynamics

RE/MAX anticipates that nearly half (44%) of Canadian regions will shift to a seller’s market in 2025, including York Region, Sudbury, and Windsor in Ontario. About a third (33%) of regions, including Toronto and Mississauga, are expected to balance out, while 17% will favour buyers, such as Hamilton, Muskoka, and Haliburton.

First-time buyers are largely targeting smaller residential properties such as townhomes and bungalows. Meanwhile, move-up buyers are seeking larger homes with added space, and retirees are downsizing in most regions except Calgary, where demand for larger condominiums remains strong.

Ontario Outlook

Ontario’s housing market will continue to face affordability and inventory challenges. Toronto’s prices are expected to rise by 0.1%, while more significant increases are projected in regions such as Simcoe County (+10%), Brampton (+6%), and Durham (+5%).

Balanced markets are anticipated in many of Ontario’s urban centres, including Toronto, Brampton, and Ottawa, while regions like Sudbury, Simcoe County, and York Region are expected to shift to seller’s markets. Buyer’s markets will likely prevail in areas such as Peterborough, Muskoka, and Haliburton.

Lower interest rates and extended amortization periods are driving buyer confidence. First-time homebuyers are expected to dominate market activity in most regions, with move-up buyers taking the lead in Toronto and other high-priced areas.

Western Canada Trends

British Columbia and Alberta are anticipating price increases of up to 10% in cities like Edmonton, where out-of-province buyers are boosting demand. Edmonton has become a hotspot for those priced out of Calgary’s increasingly expensive market.

Calgary and Edmonton are expected to remain competitive, with Edmonton seeing increased demand for its relative affordability. Vancouver Island and Kelowna are forecasted to have balanced markets, while Victoria and the Greater Vancouver Area (GVA) are set to favour sellers.

Evolving Buyer Preferences

According to a Leger survey commissioned by RE/MAX Canada, 47% of Canadians now prioritize properties in areas less susceptible to climate change—a 14% increase from 2024. Confidence in the value of working with realtors has also risen, with 62% of Canadians expressing belief in the importance of professional guidance.

Looking Ahead

As Canadians navigate shifting market conditions, the outlook for 2025 is largely optimistic. However, challenges remain, particularly with limited housing inventory and persistent affordability issues. RE/MAX Canada advises buyers and sellers to stay informed and work with real estate professionals to navigate the evolving landscape.

For the full 2025 Housing Market Outlook Report, visit RE/MAX Canada’s website.