The real estate housing market in Canada has somewhat stabilized now that we’re at the beginning of 2025. It’s now a balanced market nationwide, although most provinces are still in a seller’s market where demand is higher than supply.
The prime rate changes are affecting mortgage rates, so home buyers may be looking at better rates in the next few months. Now could be a good time to buy a house in Canada – but it depends on your financial situation and where you live.
Key Takeaways
- After post-pandemic prices rose dramatically, price rises are stabilizing.
- Demand is still high, but supply may be catching up in some areas.
- Experts offer conflicting opinions on whether house prices will continue to decrease.
- Canada has not experienced a housing crash or housing bubble in the last few years.
- 2025 may be a good time to buy a property to lock in lower rates.
Canada’s housing in market 2025
The country overall is neither a buyer’s or seller’s market, but the majority of provinces in Canada favour sellers at this moment.
- Canada: Balanced market
- Seller’s market: AB SK, QC, NS, NB, PEI, NL
- Balanced market: ON
The ratio of sales to new listings tells you if it is a buyer’s or seller’s market. In a seller’s market, there is more demand than supply so it’s more competitive to find a property.
Key statistics about the Canadian housing market:
- Monthly transactions: 44,590 up 27% from this time in 2024
- Average sold price: $676,640, up 2.5% from this time in 2024
- New listings: 71,743, up 7.5% from this time in 2024
The current average selling price varies by property type:
- Townhouse: $648,700, down by 1.4% from this time in 2024
- Condo: $507,700, down by 2.8% $ from this time in 2024
- Single-family home: $781,700, down by 0.6% from this time in 2024
This data was current as of December 2024 from the Canadian Real Estate Association.
Average home prices by province 2025
Prices are on the rise in nearly every province. Within the province, average prices vary regionally. It’s too early for January 2025 data, but here’s what we know about 2024.
| Province | 2024 average home price (November) | Change from previous year |
|---|---|---|
| Ontario | $868,067 | 4.7% |
| British Columbia | $979,221 | 1.7% |
| Quebec | $521,742 | 12.1% |
| Nova Scotia | $442,077 | 8.4% |
| Prince Edward Island | $401,343 | 9.4% |
| Newfoundland and Labrador | $330,683 | 11.4% |
| Saskatchewan | $317,856 | 10% |
| Alberta | $500,173 | 11.3% |
| Manitoba | $374,552 | 14% |
Several provinces, including New Brunswick and Quebec, recently set records for benchmark and average home prices. In Ontario and British Columbia, benchmark prices fell slightly.
Here are some quick insights on the housing markets in some of Canada’s most populated cities:
- Toronto: Home sales are increasing, condo and home prices are coming down
- Vancouver: Home sales are increasing hugely, supply/ demand challenges forthcoming
- Montreal: Home sales are increasing dramatically, condo and single-family home prices are rising
- Calgary: Home sales are increasing rapidly, supply/demand challenges forthcoming
Housing market predictions 2025
2025 could be a good time to buy a house in Canada.
We think Canada will continue to be a seller’s market in 2025, with a balanced market in a few regions. However, increased supply of new properties plus lower borrowing rates could help determine whether first-time home buyers get into a property.
Look for these in 2025:
- Another prime rate cut in late January, leading to more affordable mortgages
- Increase in home-buying activity across the country
- Strong competition for homes in Vancouver, Toronto, Montreal, and Calgary
- Possibly lessening pressure on demand due to lower federal immigration thresholds
- More availability of condo units in Toronto, empowering buyers
- More Canadians will port their mortgages to keep low rates
Rate cuts: The Bank of Canada made several rate cuts in 2024 which affected the prime rate, the most recent of which was in December 2024. These rate cuts translate to slightly cheaper mortgage rates, which do appear to be motivating home buyers in the beginning of the new year.
Federal policies: The government’s recent changes to the price cap for under 20% down payment (from $1M to $1.5M) and increase in amortization term length (from 25 to 30) for insured mortgages may encourage buying activity. Plus, as of January 15 current homeowners can now access insured refinance up to 90% of their "improved property" value to extend their mortgage to 30 years with construction, capped at $2M home value.
As a side note, renters may experience mild relief (well, some renters). Canadian rental prices hit a 15-month low in November 2024, although rental prices have grown 18.8% over the last 3 years. Rents are down in Vancouver (-8.9%), Montreal (-2.3%), and Toronto (-9.4%). Rents are up in Calgary (5.8%) and Edmonton (5.7%) and stable in Winnipeg.
Will the Canadian housing market crash in 2025?
No, experts think that the bubble will not burst in 2025.
In fact, the last quarter of 2024 was actually one of the strongest periods of real estate activity in the last 2 decades in Canada (excluding the pandemic).
Rate cuts from the Bank of Canada are helping take off the pressure. This means that property prices may fall slightly – or they could stay stable. Either way, it’s unlikely that Canadian property prices will dip down to pre-pandemic and pre-inflationary levels.
Banks are cautious: With rising stress-test rates, banks will continue to be strict about offering mortgages only to qualified buyers even though low rates will attract more potential buyers.
Buyers are eager: A survey in 2024 found that 15% of potential buyers were waiting for one more rate cut – and Canadians got several cuts in 2024. Pent-up demand in 2025 will result in more purchases from qualified buyers.
Realtors are hopeful: Prices are rising and home-buying activity is already on the rise in January 2025, according to Canadian economists and real estate experts.
Canada continues to welcome more immigrants who need housing, despite some caps on new temporary residents. At the same time, provincial and federal red tape and a dearth of construction workers are creating challenges for actually building more housing.
Get a mortgage in 2025 if it’s the right time for you. Think about your financial circumstances, shop around for the best rate, and don’t wait too long if you’re ready to take action. Timing the market is tricky in the best of economic times.
Why is the housing market so expensive in Canada?
The housing market in Canada is so expensive because supply is low, the cost of living is high, and government regulations are preventing the construction of new homes.
- Low interest rates mean high demand
- Labour shortages mean slow building
- Foreign investors outcompete local buyers
On top of this, more than 80% of Canadians live in urban environments where affordability and demand are even more problematic.
The expensive housing market in Canada points to the country’s increasing desirability due to political, economic, and climate advantages.
Some economists at Oxford Economics Canada think it could take until 2035 for affordable property to become a reality for first-time homebuyers – and they exclude desirable places like Toronto and Vancouver from this vision. TD Economics thinks mid-2027 is a realistic estimation.
What is the average mortgage cost in Canada?
$2,141 is the average scheduled monthly mortgage payment in Canada, according to the Canada Housing and Mortgage Corporation. While this was true as of Q3 in 2024, the current number could be lower thanks to the Bank of Canada’s recent rate cuts.
Your mortgage cost depends partially on the type of mortgage you get:
1-year fixed:
- Rates: 6.64 to 7.74%
- Lowest right now: Tangerine
3-year fixed:
- Rates: 4.74 to 6.99%
- Lowest right now: Tangerine
5-year fixed:
- Rates: 4.84 to 6.84%
- Lowest right now: Tangerine
As of January 2025, you’ll find the best mortgage rates in Canada on five-year fixed-rate mortgages around 4.90% where the average is 5.35%. Tangerine is the current winner for lowest rates among the big banks. For variable mortgages, expect rates around 5.5% or higher at major banks or around 4.7% from mortgage brokers.
For context, in 2024 the average annual rates were 6.15% (1-year fixed mortgage), 5.11% (3-year fixed mortgage), and 4.9 (5-year fixed mortgage).
Current homeowners: Many of you are facing mortgage renewals in 2025, since you took out fixed-rate mortgages when the Bank of Canada rate was closer to 1%. Your mortgage payments will increase significantly.
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$25 GeniusCash + Delicious meal choices with fresh ingredients + Front-door delivery.What household income do you need to buy a house in Canada?
Housing expenses should be less than 25-30% of your household income in Canada.
It depends on the cost of the house, the size of your mortgage payment based on interest and down payment, the cost of home insurance, and other household debt (like student loans, credit cards, and car payments).
| Property price | Approximate household income to qualify |
|---|---|
| $400,000 | $85,000 |
| $600,000 | $125,000 |
| $800,000 | $165,000 |
| $1M | $205,000 |
| $1.2M | $245,000 |
Every financial institution has its own guidelines for what incomes qualify for a mortgage. However, every bank must ensure that you pass a stress test using either 5.25% or your negotiated interest rate plus 2%, whichever is higher.
Start saving with an FHSA (First Home Savings Account), or use your RRSP to fund your home purchase. After buying your home, remember to claim the first-time home buyers tax credit if you’re eligible.
FAQ
Will the housing market in Canada crash?
Experts disagree about whether or not the housing market will crash in Canada. Most are predicting a slight increase in activity in 2025 – no crash. In 2025, you may encounter more affordable mortgages, more listings, and strong competition.
How much do you need to buy a house in Canada?
The average sold price of a home in Canada is $676,640, meaning your household needs a $170,000 annual income to afford this. Your down payment, other household debt, and cost of living in your area all affect this.
Why are homes so expensive in Canada?
Homes are expensive in Canada because of high demand, low supply, zoning restrictions, rising construction costs, and low interest rates. Canada is a primarily urbanized country, which also drives up costs. Try rural areas for cheaper property.
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