CREA Presents Housing Forecast on Parliament Hill

With housing top of mind for people in Canada, earlier this week, Shaun Cathcart, CREA’s Senior Economist, Janice Myers, CREA CEO, and Valérie Paquin, CREA Chair-Elect took to Parliament Hill to unveil our housing market forecast for 2025.  

Each quarter, the Canadian Real Estate Association (CREA) updates its forecast for home sales activity and average home prices via the Multiple Listing Service® (MLS®) Systems of Canadian real estate boards and associations.

CREA’s latest forecast is little changed from the fall 2024 outlook. The assumption remains that the combination of two and a half years of pent-up demand and lower borrowing costs, together with the usual burst of spring listings will lead to a rebound in market activity across the country in 2025. There was a good preview of what that might look like during the fourth quarter of 2024.

In addition to lower mortgage rates, the expectation the Bank of Canada may soon signal that interest rates are about as low as they are likely to go in this easing cycle could spur even more demand from those who have been waiting for the right time to lock in a fixed-rate mortgage.

This rebound in demand is expected to play out differently across Canada, with British Columbia and Ontario expected to see bigger rebounds on the sales side owing to how low sales are there currently, together with more plentiful inventories, and less scope for price gains in these already expensive parts of the country.

By contrast, increased demand is expected to play out more on the price side in Alberta and Saskatchewan where sales were already near record levels in 2024, inventories are currently near-20-year lows, and prices are still relatively more affordable.

Manitoba, Quebec, and the Atlantic provinces are all expected to fall between these extremes, with both more sales and higher prices in 2025.

While the main upside risk that years of pent-up demand could all show up at the same time as opposed to being more spaced out is still very much a possibility, a significant new downside risk has appeared in the form of a potential major trade war with the United States and the implications this could have on the Canadian economy.

With little way of incorporating either of these into the forecast numbers at this point, these risks will be evaluated based on incoming information and data between now and CREA’s next forecast in April 2025, and incorporated into that outlook accordingly.

Some 532,704 residential properties are forecast to trade hands via Canadian MLS® Systems in 2025, representing an 8.6% increase from 2024. This represents an upward revision to the previous forecast for a 6.6% increase, based primarily on the surprising strength of markets across most of Canada in the fourth quarter of last year.

The national average home price is forecast to climb by 4.7% on an annual basis to $722,221 in 2025, little changed from the 4.4% gain forecast last October. Outside of British Columbia and Ontario, these kinds of price gains and some even larger ones are already well underway.

In 2026, national home sales are forecast climb a further 4.5% to 556,662. The national average home price is forecast to rise by 3.3% from 2025 to $746,379 in 2026.