Navigating the 2025 Real Estate Market

The Canadian real estate market is evolving rapidly in 2025, shaped by economic shifts, changing buyer behaviors, and government policies. Industry experts emphasize the importance of staying informed to navigate these changes effectively.

 

Economic Outlook and Interest Rates

Benjamin Tal, Deputy Chief Economist at CIBC, highlights that the Canadian economy is projected to grow at a rate of approximately 2.5% in 2025. Interest rates are expected to decline, with the Bank of Canada cutting rates by 50 to 75 basis points. Lower bond yields will lead to a modest easing of credit conditions, improving affordability for buyers.

 

Nicole Lombardi, Vice President of Sales at TFN Realty, sees this as a turning point for the market:
“With interest rate cuts and growing buyer confidence, we anticipate a strong uptick in sales throughout 2025. TFN has launched innovative programs to support builders in moving standing inventory, including cutting-edge solutions like SaleFish software systems.”

 

Market Trends: Low-Rise vs. High-Rise

A key trend in 2025 is the divergence between low-rise and high-rise segments:

• Low-rise homes are set to lead the recovery, driven by lower mortgage rates and limited inventory, which will fuel price growth.

• High-rise condos face challenges due to oversupply and reduced investor interest, keeping prices subdued.

Barbara Lawlor, CEO and Partner of Baker Real Estate Inc., highlights the changing landscape of demand in the GTA: “While immigration and international student numbers have moderated, there remains strong demand from end-users and investors looking to secure long-term value in the market,” Lawlor notes. She emphasizes that buyers are taking a more strategic approach, focusing on well-located developments with strong rental potential.

 

 

Supply and Future Opportunities

Despite ongoing demand, supply constraints persist due to high government taxes and development charges. This supply-demand imbalance may push prices higher in the next 12 to 18 months, presenting an opportunity for buyers to enter the market before further increases. Additionally, the elimination of GST on new rental apartment developments provides an incentive for builders to add much-needed supply.

 

Final Thoughts

Staying informed and prepared is crucial for those looking to buy or invest in 2025. As the market adjusts, opportunities will emerge for strategic buyers and sellers who understand the evolving landscape.