Canadian Real Estate Market Outlook 2025-2026

Canadian real estate market 2025

The Canadian real estate market in 2025 is at a turning point, with projections indicating a recovery driven by lower borrowing costs, pent-up demand, and diverse regional dynamics. The Canadian Real Estate Association (CREA) forecasts significant growth in sales and prices, but challenges like housing affordability and economic uncertainties remain. This article explores the Canada housing market forecast, CREA projections, home price trends for 2025 and 2026, regional variations, and key factors shaping the market. It also addresses critical questions: Where is the Canadian real estate market headed, and is now a good time to buy a house in Canada?

CREA Forecast: Sales and Price Projections

The CREA forecast for 2025 estimates 532,704 residential properties will trade hands via Canadian MLS® Systems, an 8.6% increase from 2024. The national average home price is projected to rise 4.7% to $722,221. Looking ahead to 2026, prices are expected to climb 3.3% to $746,379, with sales growing 4.5% to 556,662 units. These figures suggest a market rebounding from recent slowdowns, fueled by stable mortgage rates and renewed homebuyer confidence.

External factors, such as potential trade disputes with the United States, could pose risks to these projections. Economic stability, job growth, and population trends will be critical in determining whether the market sustains this upward trajectory.

Interest Rates and Economic Drivers

The Bank of Canada’s interest rate policies are a cornerstone of the Canada real estate outlook. In 2024, multiple rate cuts reduced borrowing costs, and further reductions are anticipated in 2025, potentially marking the end of the easing cycle. Lower rates are expected to stimulate demand, particularly among buyers waiting to secure favorable mortgage terms. However, the pace of these cuts remains uncertain, and slower reductions could delay the market’s recovery.

Economic factors affecting the Canadian housing market include employment trends, wage growth, and immigration. Canada’s record population growth in 2023, driven by immigration, has significantly increased housing demand, particularly in urban centers and more affordable regions. This influx supports long-term market growth but strains supply in high-demand areas. Conversely, risks such as tariff disputes or global economic slowdowns could dampen buyer sentiment, underscoring the need for cautious planning.

Housing Affordability: A Persistent Challenge

Housing affordability remains a significant barrier for many Canadians. Despite moderating price growth, high home prices and rising living costs make it difficult for first-time buyers to enter the market. Urban centers like Vancouver and Toronto face acute affordability issues, while provinces like Alberta, Saskatchewan, and Manitoba offer more accessible options. For those wondering, “Is now a good time to buy a house in Canada?” the answer hinges on location, financial readiness, and market timing.

Government initiatives, such as tax incentives or support for first-time buyers, may provide some relief, but meaningful improvements are unlikely in the near term. Buyers in provinces with affordable real estate, such as Atlantic Canada or Manitoba, may find better opportunities, while those in pricier markets should weigh the benefits of waiting for potential price stabilization.

Regional Real Estate Trends Across Canada

Canada’s real estate market is highly regional, with distinct trends shaping each province’s outlook. Below is a detailed look at key markets:

British Columbia

The real estate market in British Columbia, particularly Vancouver, remains one of Canada’s most expensive. Affordability challenges persist, with condo oversupply potentially softening prices in 2025. Demand for single-family homes, however, remains strong, driven by the region’s economic vibrancy and lifestyle appeal. Prices are expected to stabilize or see modest declines in urban areas, offering opportunities for strategic buyers.

Ontario

The Ontario housing market in 2025 will be heavily influenced by the Greater Toronto Area (GTA), a key driver of national trends. Condo oversupply in Toronto may pressure prices, while demand for detached homes in suburban areas could rise due to affordability. Regions like Ottawa and Hamilton are poised for steady growth, appealing to buyers priced out of the GTA’s core.

Alberta

Alberta’s property market outlook is among the strongest in Canada. Edmonton and Calgary are expected to see steady price growth, from $397,000 in 2024 to $463,000 by 2029, supported by a robust economy, urban development, and relative affordability. Alberta’s market is attractive for both local buyers and investors seeking value in a growing region.

Saskatchewan

Saskatchewan’s home prices benefit from economic stability and affordability. Cities like Saskatoon and Regina are projected to see moderate price growth, making the province a compelling option for buyers seeking alternatives to pricier markets. Its stable market dynamics appeal to those prioritizing value.

Quebec

Quebec’s housing trends are positive, with a projected 4.7% sales increase in 2025. Montreal’s average home price is expected to rise from $543,000 in 2024 to $632,000 by 2029, driven by a diverse economy and cultural appeal. The province’s balanced market makes it attractive for buyers and investors alike.

Atlantic Canada

The Atlantic Canada real estate market is forecast to experience moderate price and sales growth, supported by economic stability and migration from other provinces. Halifax, in particular, benefits from affordability and growing demand, making the region a viable option for first-time buyers.

Manitoba

Manitoba’s real estate forecast emphasizes affordability and steady growth. Winnipeg offers urban amenities at lower costs than larger cities, appealing to buyers seeking value. The province’s stable economy supports consistent market activity, making it a reliable choice for homebuyers.

Market Drivers: Immigration and Urbanization

The impact of immigration on housing in Canada is profound. Record population growth has driven demand, particularly in urban centers and affordable regions. Cities like Calgary, Montreal, and Halifax benefit from this trend, while smaller markets in Saskatchewan and Manitoba see spillover demand. Urbanization also plays a role, with buyers gravitating toward areas with strong job markets and infrastructure.

However, this demand exacerbates supply shortages in high-growth areas, pushing prices higher and intensifying affordability challenges. Developers and policymakers face pressure to increase housing stock, particularly in urban centers, to meet these needs.

Strategies for Buyers and Sellers

For buyers, the real estate sales forecast suggests early 2025 could be an opportune time to act, particularly in affordable regions, before prices accelerate. First-time buyers should explore provinces like Saskatchewan, Manitoba, or Atlantic Canada, where affordability is less strained. Securing pre-approved mortgages and working with experienced real estate agents can provide a competitive edge in fast-moving markets.

Sellers may benefit from listing during peak demand periods, such as spring or summer 2025, when buyer activity is expected to peak. Pricing competitively and highlighting property features, such as proximity to amenities or energy efficiency, can attract serious buyers. Both buyers and sellers should monitor local market trends and consult professionals to navigate uncertainties.

Risks and Future Considerations

The Canadian housing market in 2025 faces several risks. Trade disruptions, particularly with the United States, could impact economic growth and buyer confidence. Additionally, if interest rate cuts slow, borrowing costs may stabilize at higher levels, affecting affordability. Other risks include supply chain issues impacting new construction and unexpected shifts in immigration patterns.

Looking beyond 2026, the market’s trajectory will depend on how these risks are managed. Continued investment in housing supply, coupled with stable economic policies, could support long-term growth. Buyers and sellers should remain vigilant, tracking economic indicators and seeking expert advice to make informed decisions.

Conclusion

The Canadian real estate market in 2025 and 2026 offers a cautiously optimistic outlook, with CREA’s home price forecast projecting moderate growth in sales and prices. Stable mortgage rates, immigration-driven demand, and regional opportunities in Alberta, Saskatchewan, and Quebec fuel this recovery. However, affordability challenges, trade uncertainties, and economic risks require careful navigation. By understanding regional trends, leveraging professional guidance, and timing their moves strategically, buyers and sellers can capitalize on opportunities in this evolving market. Whether exploring real estate in British Columbia or seeking value in Atlantic Canada, informed decisions will be key to success.