As we progress further into 2025, still looming over homebuyers, sellers, and investors is one simple question: Will real estate prices fall in Canada this year?
The Canadian housing market has experienced its own highs and lows during the past few years, from the pandemic-driven boom to dramatic interest rate increases in 2023–2024. And now, as things are beginning to calm down, most Canadians are eager to know what the future holds for home prices in major cities and small towns.
Here, we’ll break down the newest housing trends, what the experts are forecasting, and what it all comes down to for you—whether you’re going to buy, sell, or simply sit back and watch.
What’s Happening in the Market Today?
Until now, 2025 has seen modest price corrections in some areas and stabilization in the rest. As stated by real estate experts and economists alike, national average home value is showing signs of subdued cooling, not a sharp drop.
Factors Influencing Home Prices in 2025:
- Interest Rates: While interest rates remain above pre-pandemic levels, they have settled down compared to the high rates in 2022–2023. This has led to somewhat improved affordability.
- Shortage of Supply: Insufficient housing supply across most markets—especially cities—continues to put upward pressure on prices.
- Immigration: Canada’s strong immigration policy (targeting over 400,000 new immigrants annually) supports sustained housing demand.
- Government Initiatives: Subsidies for new housing construction, tax credits, and first-time homebuyer incentives are supporting supply and demand equally.
Will Prices Decrease in Major Cities?
Let’s take a look at a couple of regional forecasts based on more recent data available:
Toronto:
The Greater Toronto Area (GTA) has experienced moderate price corrections. With so many purchasers priced out last year, there’s a cautious re-entry into the market. Condo values are even, with detached home values decreasing slightly from 2023.
Vancouver:
Vancouver remains one of the nation’s most expensive markets. Though price growth is lower, no large crash is anticipated due to ongoing high demand and limited land available to develop.
Calgary & Edmonton
These Alberta cities are drawing increasing interest from non-province buyers. Prices are more affordable here, and modest increases are forecast for 2025.
Halifax & Atlantic Canada:
Prices softened somewhat after a pandemic bubble but are still higher than pre-2020 levels. Greater balance is forecast in these markets.
Montreal:
Montreal’s market has quieted down, with slight declines in some areas. But experts forecast stabilization, not collapse.
What the Experts Are Saying
Major Canadian banks’ economists such as RBC, TD, and Scotiabank have forecast home prices to remain relatively flat in 2025 with small decreases in hot growth markets and modest hikes in undervalued areas.
In the recent RBC Housing Outlook, no expectation of price drops that would rock the earth should exist unless there is an unexpected economic surprise or fresh spurt of interest rate hikes.
Quote: “Canadian housing is recalibrating, not imploding.” — RBC Economics, January 2025
Should You Wait to Buy?
This is the question that has been around forever, especially for first-time homebuyers. Waiting for the price to plummet might seem like the smart thing to do, but it could be a mistake.
Here’s why:
- The prices do drop a bit, but interest rates will rise again.
- Renting is still expensive, especially in Toronto and Vancouver.
- Government incentives like the First Home Savings Account (FHSA) and shared-equity arrangements are making it easier to enter the cost these days.
If you’re ready, though, 2025 can still be a great year to buy—especially if you focus on long-term value and affordability.
2025 Buyer Tips
- Get Pre-Approved: Know what you can afford before you start shopping.
- Watch Interest Rate Trends: Fixed mortgages might offer stability this year.
- Explore Underrated Cities: Consider areas like Winnipeg, Regina, or Moncton for better value.
- Use Government Incentives: Programs like the FHSA and HBP can help reduce upfront costs.
- Work With a Local Realtor: They know the neighbourhoods where value and opportunity meet.
What About Sellers?
If you’re selling in 2025, the key is to price your home realistically. Overpricing can lead to stagnation.
To Sell Faster:
- Stage your home professionally
- Invest in minor repairs and curb appeal
- Be open to bargaining
- Consider timing—spring and early summer are when more buyers arrive
Final Thoughts
Will real estate be less expensive in Canada this year? The reply is: not radically. 2025 will be a year of stabilization, not steep plunges. For buyers, it’s an opportunity window. For sellers, it’s strategy and resilience.
The market isn’t collapsing—but it is evolving. And being informed is the secret to moving forward with confidence.
Need Direction on Your Local Market?
Reach out to our team for a free consultation. Buying or selling, we’ll guide you every step of the way.
