How high will home prices get in 2025? Depends where you live
Global News
If the Bank of Canada signals the policy rate may have settled at the bottom, CREA said that could set up a wave of activity in the already traditionally busy spring market.
Some Canadian real estate watchers are expecting borrowing costs to hit their floor at the same time sellers flood the spring market with listings, unleashing a flood of activity in many housing markets across Canada in early 2025.
That could send home prices higher in many cities — but not all markets will feel the forecast housing rebound equally, experts warn.
The Canadian Real Estate Association released its 2025 housing outlook on Wednesday, the same day it reported home sales activities for December.
CREA said that while December sales fell flat with a 5.8 per cent monthly decline, higher activity in November and October helped to power the final quarter of 2024 to a stronger result.
December’s sales figures came in 13 per cent higher than activity in May, a month before the Bank of Canada started lowering its benchmark interest rate.
That easing cycle has since seen the central bank lower its policy rate by 1.75 percentage points, including a pair of back-to-back half-point cuts in October and December. Most economists expect a few more interest rate cuts from the central bank this year.
CREA senior economist Shaun Cathcart told reporters at a press conference Wednesday that, if the Bank of Canada delivers a couple more cuts in the months to come and signals the policy rate may have found its settling point, that could set up a wave of activity in the already traditionally busy spring market.
Canada has seen record population growth in the past few years, but that demand hasn’t shown up in ownership markets amid ongoing affordability challenges tied to both a lack of supply and higher interest rates from the Bank of Canada, Cathcart explained.
