Our Bold Real Estate Predictions for 2025

1. Home Prices to Rebound by Mid-2025

Prediction: After a year of stabilization in 2024, home prices will rise by 5%-8% nationally in 2025, with higher growth in Alberta and Ontario due to demand recovery fueled by declining interest rates and strong population growth.

Why?: Immigration will continue to drive demand, particularly in metropolitan areas, and renewed buyer activity will deplete current inventory levels.

2. Continued Struggles in the Pre-Construction Market

Prediction: The pre-construction market will face ongoing challenges due to the significant price gap between new builds and resale homes. Developers may delay launches or scale back projects, leading to a long-term supply shortage.

Why?: High construction costs, cautious investor activity, and regulatory pressures will keep this segment subdued.

3. Renewed Strength in Luxury Markets

Prediction: Luxury real estate in cities like Toronto, Vancouver, and Montreal will see a surge in demand, driven by global buyers taking advantage of a stable Canadian market and lower borrowing costs.

Why?: Easing interest rates and ongoing geopolitical uncertainty will make Canada’s high-end real estate market an attractive asset class.

4. The Rise of Smaller Urban Markets

Prediction: Mid-size cities like Halifax, Calgary, and Kelowna will continue to outperform larger metros in price appreciation, attracting young families and remote workers.

Why?: Affordability and quality of life will drive migration to these regions, supported by strong infrastructure investments.

5. Interest Rates to Stabilize

Prediction: The Bank of Canada’s key rate will stabilize at around 2.50%-2.75% by late 2025, offering buyers and investors more certainty in planning their real estate decisions.

Why?: As inflation reaches the BoC’s 2% target, a stable rate environment will follow, supporting economic recovery.

6. Gradual Price Recovery for Condos

Prediction: Condo prices in Toronto will begin stabilizing in mid-2025, with modest price growth of 2%-4% by the end of the year.

Why?: As interest rates decline, affordability improves, pulling more first-time buyers and investors back into the market. However, the recovery may be slow due to high inventory levels and cautious buyer sentiment.

7. Increase in Demand for Larger Units

Prediction: Developers and sellers will focus more on larger, family-oriented condo units as consumer preferences shift away from "shoebox" condos.

Why?: Remote work, lifestyle changes, and long-term urban living preferences will drive demand for livable spaces, especially for young families who can’t afford detached homes.

8. Foreign Buyer Ban Adjustments or Repeal

Potential Change: A new government (if elected) may revisit the foreign buyer ban on residential real estate, either by relaxing restrictions, narrowing the scope, or repealing it altogether.

Impact: If relaxed, this could bring renewed demand from international investors, particularly in metropolitan areas like Toronto and Vancouver, potentially driving up prices in the luxury and investment property markets.

Wishing all our readers Happy Holidays, Merry Christmas, and a Prosperous 2025