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The Canadian housing market is set for significant changes in 2025, as interest rate cuts implemented in late 2024 are expected to spark renewed activity.

According to RE/MAX Canada, the national average residential price is predicted to rise by 5%, with sales activity increasing in 33 of 37 surveyed regions. These developments come as homebuyers, particularly first-timers, return to the market amidst improved borrowing conditions.

“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,” RE/MAX Canada president Christopher Alexander said. "However, a boost in sales, coupled with limited inventory, almost always leads to rising prices, which is the trend we're expecting to see materialize in virtually all Canadian housing markets."

Surveyed regions revealed a range of market dynamics heading into 2025. RE/MAX Canada expects 44% of regions to favour sellers, including key areas such as Victoria and Greater Vancouver in British Columbia, Edmonton in Alberta, and Halifax in Nova Scotia.

Meanwhile, 33% of regions, including Toronto and Ottawa in Ontario, are expected to experience balanced conditions. Buyer-favoured markets like Peterborough, Muskoka, and Haliburton in Ontario will make up 17% of the market.

First-time homebuyers are anticipated to play a significant role in driving market activity in 2025, according to RE/MAX brokers in 81% of surveyed regions. Many buyers in this demographic are seeking townhomes or bungalows, while move-up buyers are focused on larger properties with more space. On the other hand, retirees are largely looking to downsize, but Calgary continues to see demand for larger condominiums and villas among this group.

Consumer preferences are also shifting, with 47% of Canadians prioritizing properties in areas less vulnerable to climate change—a 14% increase compared to 2024. Confidence in working with real estate professionals is likewise growing, with 62% of survey respondents affirming the value of engaging brokers or agents in the buying or selling process.

Regional outlooks show varied price growth and sales expectations. In British Columbia and Alberta, prices are projected to rise between 3% and 10%, with increased sales activity in areas such as Vancouver Island and Edmonton.

Ontario markets will see more moderate increases, ranging from 0.1% in Toronto to 10% in Simcoe County, while Atlantic Canada anticipates price gains of up to 8% in regions like Truro and Colchester County.

Despite ongoing affordability challenges, lower mortgage rates and new 30-year amortization options appear to be boosting buyer confidence. Some 49% believe home ownership is attainable, while 40% are considering relocating to more affordable neighbourhoods.

Source: Canadian Mortgage Professional