Pricing Trends and Market Forecasts in Canadian Real Estate

The Canadian real estate market is expected to experience modest price declines in 2025, with the national average home price forecast to decrease by about 1.7% to approximately $677,368. This reflects a slight downward revision from earlier forecasts due to economic uncertainties such as tariffs and regional market challenges, particularly in British Columbia, Alberta, and Ontario.

Key pricing and market trends include:

• Price Growth and Decline: While the overall national price index is projected to rise slightly by 0.7% in early 2025, prices are expected to decline in the latter half of the year and into 2026, with an anticipated 0.7% national price drop in 2026. Ontario and British Columbia are forecast to see the steepest price declines due to high inventory and affordability issues.

• Sales Activity: Home resales are projected to decline by 3.5% in 2025, with a rebound of 7.9% expected in 2026. However, sales volumes will likely remain below pre-pandemic averages due to factors such as a fragile labour market, reduced immigration targets, and affordability constraints.

• Regional Variations: More affordable markets, such as Alberta and Quebec, have begun recovering earlier and are expected to see stronger sales and faster price growth in the first half of 2025. In contrast, markets with higher unaffordability, notably Ontario and British Columbia, will experience slower price growth and sales below their 10-year averages.

• Demand Drivers: The recovery phase is anticipated to be supported by pent-up demand, lower interest rates, and an improving economy, although the timing of recovery has shifted from spring to summer 2025 due to earlier economic uncertainties.

• Emerging Hotspots: Outside major metropolitan areas, cities like Quebec City, Regina, Saskatoon, Saint John, Edmonton, and Fredericton are showing strong price appreciation and sales growth, with some regions experiencing double-digit year-over-year price increases.

In summary, the market forecast points to a cautious recovery with modest price declines nationally in 2025, regional disparities in price and sales performance, and a gradual return of buyer activity driven by improving economic conditions and affordability in select areas.