Canada’s housing market in 2025 is shaping up to be one of the most complex in recent years. With interest rates declining, inventory levels rising, and home prices fluctuating across regions, buyers and sellers are navigating an unpredictable landscape.
While some markets favor buyers due to increased supply and falling competition, others remain strong for sellers, particularly where demand continues to outpace supply.
National Overview: A Market in Transition
Across the country, home sales declined by 7% in Q4 2024, while new listings increased by 12% year-over-year. The national average home price reached $695,000, reflecting a 4.2% increase from the previous year. While home prices remain high, they are growing at a slower pace compared to previous years.
The Bank of Canada’s decision to lower interest rates to 4.5% in late 2024 has provided some relief to buyers, improving affordability slightly. However, many are still waiting for further cuts before making a move, leading to a slowdown in sales activity in several cities.
Ontario: A Buyer’s Market Emerging?
In Ontario, rising inventory levels are shifting the market dynamics. The Greater Toronto Area (GTA) saw a 16.4% increase in new listings, giving buyers more options and reducing the intense competition that previously defined the market. Condo prices in the GTA dropped by 1.5% year-over-year, while detached home prices increased by 3.5%, reaching an average of $1.46 million.
Buyers now have greater negotiating power, particularly in the condo market, where high supply levels have created price flexibility. However, affordability remains a key concern, as mortgage rates are still relatively high, preventing a full shift to a buyer’s market.
Sellers in suburban markets like Kitchener-Waterloo, Durham, and Barrie continue to see steady demand, particularly for semi-detached and detached homes. Well-priced properties in these areas are still attracting multiple offers, making it a more balanced market rather than a full buyer’s market.
British Columbia: A Market Holding Steady
Metro Vancouver’s housing market remains one of the most expensive in Canada, with the average home price at $1.23 million, up 2.9% year-over-year. While home sales declined by 12%, demand for detached homes remains strong, particularly in high-end neighborhoods. The limited supply of detached homes in Vancouver is keeping sellers in control, while the condo market is experiencing more balance due to increased listings.
Outside Vancouver, markets in the Fraser Valley and Vancouver Island are seeing steady growth. Areas like Langley, Nanaimo, and Victoria continue to attract buyers who are priced out of Metro Vancouver but still want access to strong job markets and lifestyle benefits.
Overall, British Columbia remains a seller’s market for detached homes and a balanced market for condos and townhouses, depending on location and inventory levels.
Alberta: A Market Cooling After a Boom
Calgary and Edmonton have been two of Canada’s hottest real estate markets over the past two years, driven by affordability and strong job growth. However, Calgary home sales dropped 10% in Q4 2024, signaling a slowdown after years of rapid price appreciation. The average home price in Calgary is now $540,000, reflecting a 2.4% increase year-over-year.
The slowdown is most noticeable in the detached home market, where higher inventory levels are giving buyers more options. Some sellers are adjusting their expectations, as homes are now sitting on the market longer than in previous years.
Edmonton remains a balanced market, with steady price growth and a stable job market supporting real estate activity. Compared to Ontario and British Columbia, Alberta’s housing market remains affordable, keeping buyer interest strong.
Quebec: A Seller’s Market in Montreal
Montreal’s housing market is one of the few in Canada that remains firmly in seller’s market territory. With the average home price increasing by 5.6% year-over-year to $580,000, demand continues to outpace supply, particularly for detached and semi-detached homes. New listings in Montreal only increased by 6%, far lower than the national average, keeping competition high for available properties.
Buyers in Montreal are still facing rising prices, with limited room for negotiation in high-demand neighborhoods like Outremont, Verdun, and Côte-des-Neiges. Unlike Toronto and Vancouver, where rising listings are creating a more balanced environment, Montreal’s housing market remains tilted in favor of sellers heading into 2025.
The Rental Market’s Impact on Home Sales
One major factor influencing Canada’s real estate market is the continued strength of the rental sector. With vacancy rates below 2% in most major cities, rents are increasing nationwide. The average rent for a one-bedroom apartment in Toronto is now $2,750, while in Vancouver, it has reached $2,950, representing a 7.1% year-over-year increase.
High rental demand is keeping investors in the market, particularly in condo-heavy cities like Toronto and Vancouver. Many investors are choosing to hold onto properties rather than sell, which is limiting inventory growth in some segments. At the same time, renters are finding it increasingly difficult to transition into homeownership due to rising home prices, creating a cycle where demand for rentals continues to fuel the market.
What to Expect for the Rest of 2025
The question of whether 2025 will be a buyer’s or seller’s market depends on several key factors. If interest rates continue to decline, more buyers could enter the market, leading to increased sales activity. However, if home prices remain high and affordability challenges persist, the market could stay balanced in most regions, with buyers having more negotiating power but sellers still able to hold firm on pricing in competitive areas.
Toronto’s condo market may continue to favor buyers, while detached homes in high-demand suburbs could remain competitive for sellers. Calgary and Edmonton are expected to remain stable, while Montreal’s market could see continued price appreciation if supply fails to keep up with demand.
Overall, 2025 is shaping up to be a transitional year for Canada’s housing market. Buyers are gaining some leverage in key markets, but sellers still have the advantage in areas where supply remains tight. The rental market’s strength will also play a key role, influencing investor activity and long-term housing trends.
A Market in the Middle
Canada’s real estate market in 2025 is neither fully in favor of buyers nor sellers, but rather sitting at a point of balance. Certain markets, like Toronto’s condo sector and Calgary’s detached home market, are shifting toward buyers, while areas like Montreal and Vancouver’s detached market remain strong for sellers.
For buyers, patience and strategic negotiation will be key to securing the best deal. For sellers, pricing competitively and understanding regional trends will be crucial in attracting serious offers. With interest rates, inventory, and affordability continuing to evolve, 2025 will be a year of careful decision-making for all participants in Canada’s housing market.
