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In 2025, the Canadian housing market is projected to experience a significant rebound, driven by lower borrowing costs and favorable conditions for buyers. The Canadian Real Estate Association reported a 26% year-over-year increase in home sales in November, marking the second consecutive month of such gains. Experts expect the market to be more robust, with first-time homebuyers actively entering the market. The Bank of Canada's recent interest rate cuts have alleviated some affordability challenges, and further anticipated rate decreases are expected to bolster consumer confidence.

However, the market remains constrained by limited housing supply, particularly in Ontario and British Columbia, where significant supply backlogs persist. TD Bank forecasts a 16% increase in home sales across Canada in 2025, with average home prices rising by 8%. Additionally, recent federal mortgage rule changes, such as extending the maximum mortgage amortization period for first-time homebuyers and raising the cap for insured mortgages, are expected to support the market. Despite these positive indicators, experts caution that the initial surge in demand may be short-lived, and the market's long-term health will depend on sustained economic growth and continued policy support.

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