Canada’s real estate market is expected to see rising prices in 2025, driven by growing demand and persistently limited inventory.
According to Re/Max Canada’s 2025 Housing Market Outlook Report, interest rate cuts and increased consumer confidence are likely to boost sales activity across the country. However, this combination of heightened demand and constrained supply is projected to push the national average residential sale price up by 5 per cent.
“While affordability challenges persist, the sequential interest rate cuts and changes to the mortgage stress test are a much-needed reprieve for those looking to get into the market,” says Christopher Alexander, president of Re/Max Canada.
The report, which surveyed 37 regions across Canada, also predicts sales activity will increase in 33 of those regions, with some areas anticipating growth of up to 25 per cent.
Re/Max agents across the country noted that first-time homebuyers—highlighted as the primary drivers of market activity in 81 per cent of surveyed regions—are poised to benefit most from these conditions.
Shifts in market dynamics and consumer confidence
Canadian consumer sentiment about the housing market remains cautiously optimistic. A Leger survey commissioned by Re/Max revealed that 36 per cent of Canadians expect housing market conditions to improve in 2025, while 73 per cent continue to believe homeownership is still the best investment they can make.
Unsurprisingly, affordability challenges remain top of mind. Nearly half of Canadians believe homeownership is attainable, while 40 per cent are open to relocating to new neighbourhoods to address rising costs. Additionally, the survey found an increasing interest in climate-resilient housing, with 47 per cent of respondents prioritizing properties less likely to be impacted by climate change—a 14 per cent increase from 2024.
Regional market insights: A seller’s market on the horizon
The report projects that 44 per cent of Canadian housing markets will shift to favour sellers in 2025. This trend will be especially pronounced in Western Canada, where residential prices are expected to rise by three to 10 per cent. For example:
- Edmonton: Prices are anticipated to climb by 10 per cent, where Re/Max expects an influx of homebuyers from Calgary who’ve been priced out and looking to Edmonton for an affordable way to enter or invest in the housing market.
- Greater Vancouver Area: A projected price increase of 7 per cent aligns with expected sales growth of up to 20 per cent.
Ontario, the country’s largest housing market, is also forecasted to experience price increases across the province, ranging from 0.1 per cent in Toronto to 10 per cent in Simcoe County.
Toronto and other urban centers such as Mississauga and Kitchener-Waterloo are expected to see balanced market conditions, while regions like Sudbury and York Region are likely to favour sellers.
In Atlantic Canada, prices are predicted to rise in every surveyed market, with notable increases of 8 per cent in Truro & Colchester, Nova Scotia and St. John’s, Nfld.
Key trends for 2025: Inventory, buyer demographics and affordability
Re/Max brokers and agents identified first-time homebuyers, move-up buyers and downsizing retirees as the leading demographic groups shaping the market in 2025. Demand for smaller, affordable properties such as townhomes and bungalows is expected to dominate, while move-up buyers are looking for larger homes.
Affordability and inventory will continue to pose challenges across many regions, particularly in highly competitive markets like Toronto and Vancouver.
“The current environment is more encouraging than it has been in the past few years, especially for first-time homebuyers,” Alexander notes. “However, a boost in sales, coupled with limited inventory, almost always leads to rising prices, which is the trend we’re expecting to see materialize in virtually all Canadian housing markets.”
