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The Canadian real estate market in 2025 is in a phase of recalibration. After years of intense market fluctuations triggered by the pandemic, inflationary pressures, interest rate volatility, and shifting immigration policies, the current housing landscape reflects both resilience and uncertainty. From home price projections to affordability challenges and regional market outlooks, this article provides a detailed breakdown of where Canada’s real estate market is headed.
According to the latest Canada housing market forecast from the Canadian Real Estate Association (CREA), home sales and prices are expected to recover modestly in 2025. CREA's national resale housing outlook shows a potential 10-15% increase in sales activity year-over-year as interest rate pressures ease and consumer confidence begins to return. This growth, however, is likely to vary significantly across provinces, with Western Canada expected to outperform more overheated markets in Ontario and British Columbia.
For buyers and sellers alike, understanding the trajectory of the market depends heavily on economic stabilization and rate policies. A crucial question for many observers is: Will home prices rise in Canada in 2025 and beyond? The consensus is that while prices will not return to pandemic-era peaks, most markets will experience moderate appreciation as demand gradually increases and supply constraints persist.
CREA projects the average home price in Canada in 2025 to land between $700,000 and $720,000 nationally. This estimate factors in the stabilizing effect of interest rates, a gradual recovery in consumer demand, and the ongoing immigration-driven population increase. Looking ahead to 2026, the trend of modest price growth is expected to continue, though the CREA home price forecast 2025–2026 notes some uncertainty tied to broader economic performance and global financial conditions.
Canadian home prices in 2026 are projected to rise by approximately 3-5% nationally, with lower-priced markets like Saskatchewan and parts of Atlantic Canada likely to outperform due to increased interest from both investors and end-users looking for affordable housing alternatives.
The Bank of Canada interest rates are a central factor influencing the pace of housing activity in 2025. Following a period of rapid interest rate hikes intended to curb inflation, the market has now entered a more stable phase. Most economists expect interest rates in Canada to remain steady through the first half of 2025, with possible gradual reductions beginning later in the year.
Stable mortgage rates in Canada in 2025 will be instrumental in restoring affordability and homebuyer confidence. With five-year fixed rates hovering around 5% and variable rates expected to drop slightly, more Canadians may find the cost of borrowing manageable again. For many wondering if now is a good time to buy a house in Canada, the answer depends largely on regional affordability and personal financial readiness, but the broader trend indicates improved conditions ahead.
Despite more predictable mortgage conditions, housing affordability in Canada remains a key concern. High home prices in major urban centres such as Toronto, Vancouver, and Montreal continue to outpace wage growth, making it difficult for first-time buyers to enter the market. A 2025 analysis by RBC estimates that households in Toronto now require over 80% of their income to cover mortgage payments on an average home.
This situation is leading to increased demand in provinces with affordable real estate in Canada, including Alberta, Saskatchewan, and several Atlantic provinces. These regions offer not only lower entry prices but also potential for long-term price appreciation, making them attractive to both buyers and investors.
Regional variation is a defining characteristic of the Canadian housing market. Each province faces different economic realities, supply constraints, and demographic dynamics. Below is a snapshot of what to expect across Canada in 2025:
Ontario remains Canada’s most active and diverse real estate market. While Toronto continues to see high demand, affordability challenges have led to increased interest in smaller cities such as Hamilton, Kitchener-Waterloo, Kingston, and London. The Ontario housing market in 2025 is expected to experience moderate price growth, but much of the new activity is forecast to occur outside the GTA, particularly in areas with better affordability and transit connectivity.
The British Columbia housing market, especially in the Lower Mainland, remains heavily influenced by limited supply, foreign investment rules, and affordability constraints. Although price growth has moderated since its peak, demand continues to exceed supply in key areas. In 2025, Vancouver and surrounding municipalities are expected to see low to mid-single-digit price increases, supported by population growth and constrained land availability.
Alberta is one of the most promising regions for real estate in 2025. With cities like Calgary and Edmonton offering comparatively low prices, strong job markets, and significant in-migration from other provinces, the Alberta property market outlook remains positive. Price growth between 4% and 6% is expected, especially in family-friendly suburbs and areas seeing new construction.
Saskatchewan continues to offer some of the lowest home prices in the country. The average detached home remains under $400,000 in many areas, making it a prime destination for first-time buyers and investors. Saskatchewan home prices in 2025 are expected to increase slightly, by 3% to 4%, as demand grows and inventory remains constrained.
In Quebec, markets like Montreal, Laval, and Quebec City remain popular with both local and international buyers. Housing demand is strong, though affordability concerns persist. The Quebec housing trends for 2025 point to steady, sustainable price growth, especially in suburban communities where new developments are helping to balance supply and demand.
The Atlantic Canada real estate market continues to benefit from affordability and lifestyle-driven migration. Nova Scotia, Prince Edward Island, and New Brunswick have seen a surge in demand, particularly from Ontarians and British Columbians seeking lower costs. However, limited housing supply has created upward pressure on prices. Modest gains are expected in 2025, especially in cities like Halifax and Moncton.
Winnipeg remains the dominant market in Manitoba, characterized by moderate pricing and a balanced inventory level. The Manitoba real estate forecast for 2025 predicts steady sales activity and stable price growth around 2% to 3%, driven by a combination of local demand and in-migration from higher-cost provinces.
Several macroeconomic factors are shaping the real estate landscape in 2025. These include:
Slowing inflation and a stable interest rate environment
Steady employment levels in most provinces
High levels of consumer debt are impacting borrowing capacity
Delays in new housing completions are contributing to the tight supply
Changes to immigration targets that continue to fuel housing demand
The impact of immigration on housing in Canada is particularly notable. With record-high immigration targets set by the federal government, demand for both rental and owned housing is expected to remain elevated, particularly in larger urban centres.
While the outlook for 2025 is generally positive, several risks remain:
Persistent affordability issues in major cities
Rising construction costs and labour shortages
Regulatory changes that may affect investor confidence
Slower global economic growth could impact Canada’s economy
For investors and prospective homeowners, monitoring these risks will be crucial when making long-term decisions.
The Canadian real estate market in 2025 is headed toward more stable ground, though affordability and regional disparities will continue to define the landscape. The market is no longer in crisis, but it’s far from universally accessible. Many Canadians' housing decisions will be shaped more by where they live than by national averages.
Demand will likely shift to regions that offer a better balance of affordability, employment opportunity, and quality of life, leading many to explore homes in Alberta, Saskatchewan, and Atlantic Canada over traditional urban hubs.
As the market transitions into a post-correction phase, the Canadian real estate market 2025 offers a cautiously optimistic outlook. Sales activity is expected to rise, prices will stabilize or increase moderately, and regional trends will continue to diversify the national narrative. Whether you're buying, selling, or investing, staying informed about these shifts will be essential in navigating this evolving market.
