Canada’s housing market is poised for another dynamic year in 2025, as economic conditions, policy measures, and demographic shifts interact to shape market trends. According to RE/MAX’s annual housing outlook, the sector is expected to face challenges but will also present opportunities across various regions.
A Nationwide Snapshot
Modest Price Growth
The national housing market is projected to experience a modest increase in average home prices. The pace of growth will vary depending on region, but rising demand from first-time buyers and immigration will underpin price stability. Persistent supply shortages, combined with economic resilience, are expected to maintain a competitive market environment.
Inventory Constraints
One of the most pressing issues for 2025 is the shortage of housing supply. Many markets across the country are grappling with low inventory, which continues to create challenges for affordability. Governments and developers are exploring solutions, such as intensifying housing starts, reducing red tape for construction, and introducing zoning reforms, though their impacts will take time to materialize.
The Role of Immigration
With Canada targeting a record number of new permanent residents, the demand for housing is expected to increase, particularly in urban centres like Toronto, Vancouver, and Montreal. Immigration has consistently driven demand for both rental and ownership properties, adding pressure to already tight markets.
Regional Outlook
Western Canada
Western provinces like Alberta are emerging as hotbeds of housing activity. Cities such as Calgary and Edmonton are seeing strong market performance driven by economic stability in the energy sector and relatively affordable prices. Interprovincial migration to these cities is also boosting demand.
British Columbia, particularly Vancouver, remains one of the priciest regions in the country. While affordability challenges persist, demand continues to be high, driven by international immigration and local buyers seeking limited inventory.
Ontario
The Greater Toronto Area (GTA) remains a focal point for housing activity, with demand for detached homes and condos expected to stay strong. However, affordability challenges in the GTA have pushed many buyers toward suburban and rural markets, which are seeing increased interest and competition.
Cities like London, Kitchener, and Hamilton are also drawing attention as attractive alternatives due to their relative affordability compared to Toronto.
Atlantic Canada
Atlantic Canada continues to shine as a destination for buyers seeking a balance between affordability and lifestyle. Halifax, Moncton, and St. John’s are experiencing steady growth, fuelled by interprovincial migration and a rising interest in remote work options.
Key Challenges and Considerations
Rising Interest Rates
The Bank of Canada’s monetary policy remains a crucial factor. Higher interest rates have tempered buyer enthusiasm in some markets but have not fully offset the impact of low supply and high demand. Affordability remains a concern, especially for first-time buyers.
Supply and Affordability
Despite efforts to increase housing stock, addressing the entrenched supply-demand imbalance will take time. Developers face rising construction costs, labour shortages, and regulatory hurdles, all of which contribute to the slow pace of new housing availability.
Environmental and Policy Impacts
Sustainability is becoming an increasingly important consideration in housing development. Cities across the country are integrating green building practices and energy-efficient housing as part of long-term urban planning strategies.
Opportunities in 2025
While challenges persist, the Canadian housing market offers opportunities for buyers and investors alike. Regions with affordable housing, strong economic fundamentals, and population growth are expected to perform well. Strategic policy interventions aimed at addressing affordability and supply constraints could also yield positive results.
For a full breakdown of regional insights and expert commentary, view the full RE/MAX report here.
