Canadian Real Estate Market Trends
Key trends shaping the Canadian housing market in 2024–2025 and their impact on buyers and sellers.
Bank of Canada Rate Decisions
The Bank of Canada has been cutting its overnight rate through 2024–2025 after aggressive hikes in 2022–2023. The policy rate influences variable mortgage rates and prime rate directly.
Variable rate mortgages becoming more attractive. Fixed rates also declining as bond yields ease.
The BoC cut rates multiple times in 2024, bringing the overnight rate down significantly from the peak of 5.00% in 2023. Markets expect further cuts in 2025 as inflation approaches the 2% target.
Housing Supply Shortage
Canada faces a structural housing shortage, particularly in major urban centres. The federal government has set ambitious targets of 3.87 million new homes by 2031.
Upward pressure on prices despite affordability challenges. New construction incentives being introduced.
Canada needs to build approximately 5.8 million homes by 2030 to restore affordability, according to CMHC. Municipal zoning reforms and federal incentives are attempting to accelerate supply.
Interprovincial Migration
Strong migration from Ontario and BC to Alberta and Atlantic Canada continues, driven by affordability. Calgary and Edmonton are seeing record population growth.
Calgary, Edmonton, and Halifax markets seeing strong demand. Relative affordability attracting buyers from expensive markets.
Alberta gained over 100,000 net interprovincial migrants in 2023, the highest in decades. This is driving Calgary's strong price appreciation relative to other major markets.
Mortgage Renewals Cliff
Approximately $900 billion in Canadian mortgages are up for renewal in 2025–2026, many originally taken at record-low pandemic rates of 1.5–2.5%.
Significant payment shock for many homeowners. Some forced selling may occur, adding supply to the market.
Homeowners renewing from 2020–2021 rates will face payment increases of 30–50% or more. This is a key risk factor for the housing market and consumer spending in 2025–2026.
Foreign Buyer Ban Extension
Canada's Prohibition on the Purchase of Residential Property by Non-Canadians Act has been extended to 2027, restricting foreign buyers in most urban markets.
Limited direct impact on most markets, as foreign buyers represented a small share of purchases. Primarily symbolic policy.
The ban applies to non-Canadian individuals and foreign commercial enterprises. Exemptions exist for international students, temporary workers, and certain other categories.
Condo Market Correction
Pre-construction condo markets in Toronto and Vancouver are experiencing significant challenges, with many investors unable to close on units purchased at peak prices.
Resale condo prices under pressure in Toronto and Vancouver. Pre-construction market significantly slower.
Rising construction costs, higher interest rates, and declining investor demand have created a challenging environment for new condo development. Some projects are being cancelled or delayed.