Canada's Real Estate Market Forecast for 2024-2025

Overview

Mixed Market Forecast: Expectation of a mixed market similar to the current year.
- Weakness in Condo Segment: Particularly in the investor market.
- Investor Market Strain: Continued issues in the pre-construction market; overpaid units with appraisal issues.
- Strength in End User Market: Entry-level single-family houses and three-bedroom townhouses anticipated to perform well.
- Market Divergence (GTA): Low-rise market could remain competitive, whereas condos might continue to be sluggish.

Federal Government Changes: Impacting population growth and housing markets.
- Population Growth Projections: Zero or negative growth might affect the rental market due to a decrease in non-permanent residents who tend to rent.
- Pressure on Rents: Potential decline in rents impacting investor interests.

Pre-Construction Sales: Currently at low levels, indicating lack of investor activity.
Supply Side Outlook: Adequate for the next year or two, with potential issues further out.

Demand for Low-Rise Homes: Expected increase due to mortgage rule changes allowing more buyers.
Condo Market Outlook: Likely to remain sluggish with ongoing challenges for investors.

Challenges for Investors: Scarred by interest rate hikes and tenant-friendly laws.
- Psychological Barriers: Investor hesitation due to past market conditions and unfavorable laws.
- Speculation on Prices: Previous speculation has inflated prices, impacting affordability.
- Desire for a Balanced Market: Shift towards a market based on fundamentals rather than investor speculation.

Outlook for 2025 suggests a challenging environment for condo investors.
Markets for entry-level homes expected to be more active.
Need for a balanced market driven by fundamental affordability, not speculation.