Canadian Housing Market Forecast 2025

The Canadian housing market is at a crossroads as we look ahead to the next 12 months. After a period of rapid interest rate hikes and record-breaking immigration, the country’s major cities – Toronto, Vancouver, Calgary, and Montreal – are experiencing varied housing trends. In this forecast, we analyze condominiums vs. detached homes in each city and examine how interest rates, immigration, housing supply, and government policies will shape prices and activity. The tone is balanced and accessible, with expert insights (including notable mortgage broker Ron Butler’s candid takes on the condo sector) to help make sense of where the market is headed.

National Economic Factors Shaping Housing

Interest Rates: The Bank of Canada’s aggressive rate tightening from 2022 into 2023 pushed its key interest rate to multi-decade highs (peaking around 5%). Mortgage costs jumped, cooling homebuying demand. The good news is that rate pressures are finally easing – economists anticipate that declining borrowing costs in late 2024 and 2025 will “unlock” some pent-up demand. RBC Economics, for example, expects further rate drops in 2025 to gradually reduce homeownership expenses and make it easier for buyers to re-enter the market. That said, rates remain elevated compared to the ultra-low levels of 2020-2021, so affordability is still stretched for many. Until buyers see significant relief, many households are taking a “wait-and-see” approach in the face of economic uncertainty. On the flip side, any faster-than-expected rate cuts could boost buyer confidence and borrowing capacity, supporting housing activity into 2026.

Immigration and Population Growth: Canada experienced an unprecedented population surge recently. In 2022, the population grew by over one million people (a 2.5% jump, the highest on record), and 2023 saw an even faster 3.1% growth rate. This was largely driven by immigration – part of a federal strategy to welcome more newcomers to support the economy. Toronto, Vancouver, Calgary, and Montreal have all been major magnets for these new residents, adding robust underlying demand for housing, especially in the rental and entry-level home segments. Recognizing strains on housing and infrastructure, the government has recently moderated its immigration targets. The 2025 plan aims for about 395,000 new permanent residents (down from an initially planned 500,000). This slight pullback is intended to “alleviate pressures on housing, infrastructure, and social services”. Even at a lower target, immigration will remain historically high – meaning continued population growth will fuel housing needs in urban centers, though perhaps a bit less frenetically than in the past two years.

Housing Supply Constraints: A persistent story in Canada’s housing market is lack of supply – there aren’t enough homes to keep up with demand, especially in big cities. This structural shortage has been a key factor driving prices upward over the past decade. Going into 2025, however, the supply picture is nuanced. On one hand, new housing construction is slowing dramatically in some regions due to high financing costs and developer caution. For instance, housing starts in the Toronto area plunged by 41% year-over-year in a recent period, as builders hit the brakes on new projects. On the other hand, a wave of projects launched during the 2021 boom are now completing – suddenly adding inventory, especially condos, to the market. In the Greater Toronto Area (GTA), a record 29,700 condominium units were completed in 2024, and completions are projected to hit a new high of ~31,400 units in 2025 before tailing off. A similar condo building surge is nearing completion in Vancouver’s metro. This influx of new homes is giving some short-term relief to supply: the number of homes for sale has been rising, and active listings in early 2025 were up sharply year-over-year in markets like Toronto and Vancouver. Bottom line: Buyers will have more choice in the near term (especially in the condo segment), which is already cooling price growth. However, if current construction lulls persist, Canada could face even tighter supply down the road once this batch of new homes is absorbed – a “catch-22” scenario for policymakers.

Government Policy Changes: All levels of government are working to address housing affordability. Notably, interest rate policy (though set by the independent central bank) is a huge factor – and the Bank of Canada has indicated it will be cautious, balancing inflation control with the risk of economic slowdown. Meanwhile, federal and provincial governments have rolled out initiatives targeting housing supply and demand:

• The federal government recently removed GST (sales tax) on new purpose-built rental developments to encourage construction of rental apartments. This could spur developers to build more rental housing over the coming years, easing some pressure in rental markets.
• A two-year ban on foreign home buyers was in place through 2023-24 to curb speculative demand, and while that ban expired in 2025, foreign buying had already dwindled and its impact on demand is limited.
• The Canada Mortgage and Housing Corporation (CMHC) and regulators adjusted mortgage insurance rules to be more flexible for first-time buyers with smaller down payments, aiming to help more qualified buyers enter the market. These changes (for example, longer amortization options or higher insured loan limits) could bring some new buyers in if other conditions are favorable.
• Provincial and city governments are tackling zoning and red tape. For instance, Ontario and British Columbia have legislated to allow more multi-unit housing on land previously zoned for single homes, speeding up approvals for duplexes, laneway houses, and condos. Vancouver’s city plan now permits more density on single-family lots, and Toronto is legalizing multiplexes in all neighborhoods. These reforms should gradually increase supply, though the impact will be felt over years, not overnight.
• In Alberta, where Calgary is booming, the city’s 2023 Housing Strategy loosened some zoning rules and encouraged new rental supply, while Montreal has implemented policies like inclusionary zoning (requiring affordable units in new projects) to keep housing within reach.

Despite these efforts, experts caution that policy solutions take time. “Canada lacks the capacity to rapidly build 500,000 homes a year,” Ron Butler noted, expressing skepticism about political promises to super-charge construction. Indeed, Canada has averaged only around 225,000 new housing units annually, and even with recent measures, ramping that up will be challenging. Governments may need to consider additional interventions if market conditions worsen – for example, Butler suggested that if thousands of new condos sit empty, there could be pressure for some kind of government relief or purchases of unsold units to stabilize the market. For now, policymakers are watching closely and balancing the need for housing supply, affordability, and economic stability.

Toronto: GTA Housing Outlook (2025)

Current State (Early 2025): Toronto’s housing market has been cooling under the weight of high interest rates – sales volumes have dropped and price growth has stalled. In March 2025, Greater Toronto Area home sales were 23% lower than a year earlier, and new listings surged almost 29% year-over-year. With more supply and fewer buyers, prices have pulled back slightly. The average selling price across the GTA was about \$1.09 million, down 2.5% from a year ago. Notably, the benchmark “typical” home price fell 3.8% year-over-year, reflecting modest price declines for the first time since the pandemic dip. Many prospective buyers are sitting on the sidelines until they feel confident about the economy and their jobs. This wait-and-see mood is amplified by recent trade uncertainty and a 2025 federal election campaign, which have injected extra caution into the market.

Condos vs. Detached Homes: The condominium segment in Toronto is under particular stress. After years of relentless expansion, the GTA condo market has entered what Ron Butler calls a “creeping condo disaster”. Prices for resale condos have started to slip – condo sale prices declined about 1.6% in early 2025 (year-over-year), making condos the only housing type in the GTA experiencing price drops so far. Butler traces this to the “pricing mistakes made during the FOMO insanity of 2021”, when buyers bought pre-construction condos at prices far above fair value. Those frothy deals are now coming home to roost. Thousands of pre-construction units purchased at the 2021 peak are completing, only to find that market values are 20%–30% lower than what buyers agreed to pay. The result: some buyers are walking away from their deposits rather than close on overpriced condos, leaving developers with unsold inventory. Butler describes it as a “classic pricing mistake of frightening magnitude” – akin to a speculative bubble bursting. Indeed, GTA condo inventory is at record highs: by the start of 2025, active condo listings nearly doubled from a year prior (around 8,500 listings in January, projected to hit ~15,000 by spring). With supply far outstripping demand, condo developers have slashed pre-sale prices and offered incentives to attract buyers.

For Toronto’s detached and low-rise homes, the picture is a bit different. These properties saw sharp price corrections in 2022 but then showed resilience. In the “416” (city of Toronto) area, low-rise house prices have been more stable – benefiting from their relative scarcity. Ron Butler notes that core Toronto low-rise homes have held value better, whereas the far-out 905 suburbs are seeing prices “grinding down” under affordability pressures. As of early 2025, most GTA detached house values are slightly below last year’s levels, but only by a few percent. For example, the average detached in the suburban regions was selling around \$1.36 million in March (down from \$1.39M a year prior), while in the city of Toronto, detached values were roughly flat year-over-year (this specific stat from local board data). Buyers continue to covet family homes in the city, but the high borrowing costs have reduced how much they can pay, keeping prices in check. Sellers of detached homes, for their part, haven’t flooded the market – many are locked into low mortgages from prior years and are reluctant to sell unless necessary. This has helped prevent a steeper price drop in the low-rise segment.

Key Drivers in Toronto: Going forward, interest rates will be pivotal for Toronto. As the country’s priciest market by absolute price, Toronto is very sensitive to mortgage rates. Should rates fall later in 2025, Toronto would likely see a surge of buyers who have been waiting on the sidelines. The Toronto Regional Real Estate Board predicts activity will improve once consumers feel confident about the economy and their jobs. A stabilization or decline in rates could be the catalyst for that improved confidence.

Immigration remains a plus for Toronto’s housing demand. Toronto welcomes tens of thousands of newcomers each year, and even with slightly lower federal targets, the GTA’s population is expected to keep growing strongly. New immigrants and students initially boost the rental market (which has been extremely tight), and within a few years many look to purchase homes, adding to demand for condos and starter houses. One caveat: the current condo glut and recent rent declines (rents in the GTA have dipped a bit by ~5% as supply increased) might offer renters more breathing room in the short term. But most analysts agree the long-term rental demand in Toronto is inexorably upward given its growth, so any rent dip is likely temporary.

On the supply side, Toronto’s big story is the condo completion wave. As noted, 2025 will bring a historic number of new condo units to market. In the immediate 12-month horizon, this flood of supply will keep condo prices under pressure and could present great opportunities for condo buyers to negotiate deals. However, beyond 2025, the sharp slowdown in new project launches now (many developers have cancelled or paused projects) means far fewer new homes will be built in 2026–27. This could swing Toronto back into undersupply later on, potentially causing another cycle of price escalation a couple of years out. For now, though, Toronto’s market balance is improved: at roughly 5 months of inventory, it’s a buyer’s market for condos and a balanced market for low-rise homes (balanced conditions typically being 2–4 months of inventory).

Policy influences specifically affecting Toronto include Ontario’s housing acceleration programs (aiming to add 1.5 million homes province-wide by 2031) and City-led initiatives to allow more multiplexes and laneway suites. These should gradually add units across Toronto’s neighborhoods. Also, infrastructure expansions (like new transit lines opening) could make certain suburban areas more attractive, redistributing some housing demand within the region.

Toronto 12-Month Forecast: Expect Toronto’s housing market to remain relatively soft in the first half of the period – prices for condos likely continuing to drift downward by a few more percentage points amid high inventory, and low-rise home prices staying flat to slightly down in the near term. By late 2025, if interest rates have indeed fallen and the economy avoids major shocks, Toronto could see a modest rebound: increased sales activity and stabilization of prices. Major bank forecasts are cautious – RBC, for instance, projects minimal price growth (around +1% nationally in 2025) with demand and supply staying in balance. Toronto might underperform that early on but could finish the 12-month period with prices roughly flat year-over-year (i.e. ending 2025 about where they started, or only slightly lower). Downside risks include the potential for a recession or job losses (which would hit confidence) and any sharp uptick in forced sales (e.g., if heavily indebted owners with mortgage renewals can’t carry payments – so far default rates are low). Upside factors would be a faster economic recovery or policy stimulus that boosts buying. Overall, a reasonable base case is continued choppy waters for Toronto’s condo market (great for bargain-hunting buyers) and a gradual return to balance for the detached market as borrowing costs slowly ease.

Vancouver: Balancing Act in a High-Price Market

Current State: Vancouver’s housing market in early 2025 is best described as balanced, with subtle signs of price softening. In March 2025, the benchmark price of a home in Metro Vancouver was about \$1,190,900, a slight 0.6% decrease year-over-year. In fact, prices have come down about 5% from the all-time highs seen about 3 years ago, reflecting the market’s gentle correction. Sales activity has been subdued but not collapsed. January 2025 sales, for example, were up 8.8% from a year earlier (when the market was very slow) but still below the 10-year average for that month. Meanwhile, new listings have surged – Vancouver saw ~46% more new listings in January 2025 than a year prior. The total number of homes for sale in Vancouver is about one-third higher than last year’s very low levels, finally giving buyers more selection. The sales-to-active listings ratio sits around 14% overall (with ~16.5% for condos and ~9% for detached). This ratio indicates balanced conditions (below the 12% threshold for price declines in the detached segment, but near a neutral range for condos). As a result, prices have been essentially flat month-to-month in recent data, and bidding wars have cooled compared to the frenzy of 2021.

Condos vs. Detached: In Vancouver, both condos (apartments) and detached houses remain extremely expensive by Canadian standards, but each faces slightly different dynamics:

• Condo Market: Vancouver condos are benefiting from their relative affordability (a condo in Vancouver, while pricey, is still cheaper than a house). The average condo price in Greater Vancouver was about \$767,300 in March 2025, down <1% (-0.9%) year-over-year. That small decline suggests condos have held their value better than Toronto’s. However, Vancouver’s rental market has shown cracks, with the average rent reportedly down ~6% year-over-year. This is notable because Vancouver’s rents had been climbing relentlessly; a 6% drop indicates new rental supply (largely condos being rented out) is finally catching up to tenant demand. Like Toronto, Vancouver has many condo projects finishing up. The Lower Mainland (Vancouver area) saw record condo completions in 2023 and more set for 2024-25, which has eased the ultra-tight vacancy rates. For investors who bought pre-construction condos expecting high rents or quick flips, this is a moment of truth. Ron Butler pointed out that condo investors in both the GTA and Vancouver’s Lower Mainland are now facing falling prices and rents simultaneously – a double whammy that was unheard of during the boom. We haven’t (yet) seen the same level of buyers walking away in Vancouver as in Toronto, likely because Vancouver’s pre-sale pricing wasn’t as overextended. But it’s a risk to watch. Overall, expect Vancouver condo prices to meander – slight declines in areas with a glut of new listings, but potentially stable in core locations where demand (including from downsizers and newcomers) remains strong. By year-end, modest price movement (within ±3%) is a reasonable expectation for condos.
• Detached Homes: Vancouver’s detached houses have undergone a significant correction from their peak. Many detached values in Vancouver are still 10–15% below the crazy highs of 2017 or 2022. As of early 2025, the benchmark detached price in Greater Vancouver is around \$1.813 million (for context, that’s down a few percent year-on-year). The sales-to-listings ratio for detached is only ~9%, firmly indicating a buyers’ market for single-family homes. This imbalance is putting downward pressure on detached prices in some neighborhoods, especially higher-end segments. However, detached homes are in limited supply (zoning constraints mean few new ones get built). So if borrowing costs drop later in the year, we could see latent demand returning quickly for this segment. For now, detached prices in Vancouver are expected to be roughly flat or gently declining in the next few months. Sellers are more negotiable, and buyers with financing have some leverage. By mid-2025, it wouldn’t be surprising to see detached prices a couple of percent lower than a year prior, before possibly firming up if market conditions improve by early 2026.

Key Drivers in Vancouver: Interest rates weigh heavily here too. Vancouver’s prices relative to local incomes are among the least affordable in the world, which means the market only churns when financing is plentiful or when outside money flows in. With high rates, local buyers are maxed out, and we’ve seen sales at 2008-level lows at points. Should rates ease, Vancouver’s immense pent-up demand could ignite sales and put a floor under prices.

Immigration plays a major role as well. Vancouver remains a top choice for immigrants (especially from Asia) and interprovincial migrants seeking the west coast lifestyle. Though B.C.’s population growth might slow slightly if federal immigration targets are trimmed, the province is still expected to grow at a healthy pace (~1.7% in 2025 per some forecasts). This growth feeds housing need. Additionally, Vancouver has a sizable flow of non-permanent residents – international students and foreign workers – many of whom rent condos or basement suites. The recent drop in student visas (the federal government introduced some restrictions on study permits) might slightly temper rental demand, but so far Vancouver’s population influx continues.

Supply and Policy: Vancouver is at the forefront of policy-driven supply solutions. The province of B.C. passed legislation to allow up to four units on a traditional single-family lot in many cities, overriding municipal bylaws – a bold step to densify communities. The City of Vancouver is also moving ahead with its own plan to permit multiplexes and streamline approvals. These measures, combined with the removal of rental project GST and various municipal incentives, aim to boost housing construction significantly. The irony, however, is that current market conditions have builders pulling back (much like Toronto). Housing starts in Metro Vancouver have slowed as developers wait for market signals. If the economy stabilizes, these pro-housing policies could kick in just as demand recovers, leading to a surge of new housing starts by 2026. For the 12-month horizon, though, the main supply effect will be from projects already underway (completions adding to inventory).

A unique factor for Vancouver is the suite of demand-side policies already in place: foreign buyer taxes (20% in B.C., though foreign buyer activity is minimal now), the City’s Empty Homes Tax (which encourages owners to rent out vacant units), and the Speculation and Vacancy Tax province-wide. These have been around for a few years and are credited with freeing up some supply for locals. They will continue to act as a dampener on speculative demand, which is why Vancouver’s market now moves more in line with fundamentals like rates and jobs than it did in the wild pre-2016 era of rampant foreign buying.

Vancouver 12-Month Outlook: The baseline outlook for Vancouver is cautiously optimistic: a period of price stability and potentially “moderate price growth by the end of the year,” according to the local real estate board’s forecast. In other words, after a mild dip in early 2025, prices could tick up a bit (perhaps on the order of +2% to +4% year-over-year) by early 2026 if economic conditions improve. The Greater Vancouver Board emphasizes that this is predicated on no major shocks. They specifically warn that the new U.S. tariff threats in 2025 (a hypothetical trade war scenario) could hurt the economy and housing if they materialize – an uncertainty looming in the background. Absent such shocks, we expect balanced conditions to largely persist. Buyers will find more choice and slightly more bargaining power than in the past few years, and sellers will need to price realistically. Vancouver might not see a significant run-up in prices in the next 12 months, but its fundamental demand (driven by limited land and high desirability) will keep a floor under the market. The city’s longstanding affordability challenge isn’t going away – rather, we’re in a temporary pause in the climb. Come 2026, if rates have normalized downward, Vancouver could be poised to resume a gentle upward price trajectory, especially if new construction doesn’t keep up with the returning demand.

Calgary: Momentum Amid Affordability Advantage

Current State: Calgary has been a standout performer in Canada’s housing market recently. Even as Toronto and Vancouver cooled, Calgary saw robust growth thanks to its relative affordability, strong job market, and influx of migrants from other provinces. As of March 2025, the average home price in Calgary was around \$583,400, up 1.7% year-over-year. Calgary’s market did slow slightly from the breakneck pace of 2022–early 2023, but it remains firmly in a seller’s market for many segments. In 2024, Calgary hit record-high sales and prices. Now in early 2025, sales volumes are off those peaks but still healthy. The Calgary Real Estate Board (CREB) reported sales in 2025 are expected to stay 20% above long-term trends. Inventory has been low – in late 2024, Calgary had under 2 months of housing supply at times, causing multiple offers on reasonably priced listings. This tightness has eased a bit as new listings increased and buyers became more price-sensitive. But compared to Eastern cities, Calgary still has more demand than supply in the market. Home prices have continued to notch modest gains, and by early 2025 the benchmark price in Calgary was at an all-time high (around \$540k for the typical property, according to CREB data).

Let’s look at the split by housing type:

• Detached Homes: Calgary’s detached houses are in demand, particularly from move-up local buyers and families relocating from pricier provinces. The average single-family home sold for about \$697,600 in March 2025, up a solid 4.4% from a year prior. This rate of increase, while slower than Calgary’s double-digit surges of 2022, is still impressive in a high-rate environment. It reflects Calgary’s strong fundamentals: low unemployment (the energy sector and tech jobs have been growing), high population growth, and housing that remains affordable to a middle-class household by national standards. Even after recent rises, Calgary’s detached homes are roughly half the price of Vancouver’s and two-thirds the price of Toronto’s, making it an attractive destination for those who can move. We anticipate detached prices in Calgary to keep rising modestly in the next 12 months, perhaps another 2–5%. CREB’s forecast is for citywide prices to gain about 3% in 2025, and detached homes might be at the higher end of that range. There is some emerging competition from new home construction – builders in Calgary ramped up production to meet demand, so buyers have options between new builds in the suburbs and resales. This new supply should help moderate the pace of price growth, preventing another runaway spike, but not enough to cause a decline.
• Condos and Townhomes: The more affordable segments (condominiums, townhouses, and semi-detached homes) have also performed well. The average condo in Calgary sold for around \$342,100 in March, up 2.3% year-over-year. Condo prices in Calgary are now at their highest in many years, finally exceeding the highs from 2014 (Calgary’s market had a long lull during the 2015-2019 oil downturn). A big factor has been first-time buyers and investors snapping up condos, as they’re the entry point into homeownership. Additionally, interprovincial migrants who found houses too expensive even in Calgary often opt for condos or townhomes, driving that segment. Townhouses and duplexes averaged \$461,000 (up 1.8% YoY), showing that all property types saw gains. One interesting note: Calgary’s rentals have seen some relief; the average rent in Calgary actually decreased by 8% year-over-year to about \$1,915. This suggests the rental supply (including many condo rentals) caught up with the huge demand surge of 2022-2023. A slight vacancy increase might slow down investor appetite in the short term, but for buyers, it means the market isn’t overheated purely by speculators – end-user demand is the main driver. Over the next year, condos and townhomes in Calgary are likely to continue appreciating, albeit at a moderate pace, as long as the city’s economy stays strong.

Key Drivers in Calgary:

• Economic and Job Growth: Calgary’s fortunes are traditionally tied to the oil & gas sector. Oil prices in the past year have been relatively stable in a moderate range, which has kept energy companies profitable but cautious. There’s also diversification underway – growth in tech, logistics, and financial services. For housing, this means Calgary’s employment and wages are rising, supporting housing demand. If a global slowdown or lower oil prices hit in 2025, that could soften Calgary’s market, but current forecasts show Alberta’s economy expanding modestly.
• Interprovincial Migration: In the last couple of years, Calgary and Alberta saw a wave of migrants from Ontario, B.C., and other provinces, attracted by affordable housing and job opportunities. This was a big boost to housing demand (think of a Toronto family selling a 1,200 sq ft house for \$1.3 million and realizing they can get a larger home in Calgary for half the price – many made that move). While that trend continues, it may not be as intense as it was when interest rates first spiked (which prompted people to leave expensive regions). CREB does expect slowing migration in 2025 compared to the peak influx. Even so, Alberta’s population growth is expected to remain above the national average. Immigration from abroad also favors Alberta now; increasingly, newcomers are choosing Calgary or Edmonton for the job prospects and lower cost of living. All of this points to sustained housing demand in Calgary through the next year.
• Housing Supply and Construction: Builders in Calgary responded to the hot market by accelerating construction. Housing starts were strong in 2023, especially for single-family homes in suburban communities. As those homes complete in 2024-2025, buyers will have more new home choices, which could cap price growth in the resale market as mentioned. CREB notes “improved supply” will help Calgary’s market shift toward balance. However, Calgary does not face the same acute undersupply as Toronto – it has room to grow outward and a steady pace of new subdivisions. Thus, the supply constraint is less severe; it’s more about keeping up with demand. The city’s rental vacancy, while low, isn’t near-zero like Toronto’s was – meaning the market has some slack to absorb newcomers. Calgary’s challenge might come if interest rates drop and demand surges again – then we could quickly see the inventory tighten and prices jump unless construction keeps pace. For now, expect inventory to slowly improve, moving Calgary toward a more balanced (but still active) market by late 2025.
• Government and Policy: Alberta has fewer market interventions than other provinces (for instance, no rent control, which encourages rental development, and no provincial property transfer tax). The provincial government has been focusing on attracting investment and labor to Alberta (the Alberta is Calling campaign, etc.), which indirectly boosts housing. There aren’t any new taxes or buyer restrictions on the horizon in Calgary. The main policies affecting Calgary housing will be the general ones: interest rates and federal programs for first-time buyers. One specific point: affordability in Calgary is still within reach for many, so federal first-time buyer initiatives (like the First Home Savings Account, or insured mortgage programs) are utilized here. Also, the city’s own initiatives – such as faster permitting for new homes and suburban development plans – will shape how quickly supply can respond.

Calgary 12-Month Outlook: The consensus is that Calgary will remain one of Canada’s strongest housing markets in 2025, though not entirely immune to broader economic forces. Ann-Marie Lurie, CREB’s Chief Economist, expects housing demand to “remain strong” in 2025 with sales above normal and prices rising around 3%. The market is transitioning toward balance, so we may not see the double-digit price leaps of the recent past, but steady growth is likely. If interest rates fall sooner than later, Calgary might even get a bit of a second wind with more buyers entering, potentially pushing price gains beyond that 3% mark. Conversely, if a recession hits, Calgary’s market could slow, but thanks to how affordable it is relative to incomes, prices have a cushion – they’re not expected to drop materially barring a severe downturn. A balanced scenario would be continued modest price appreciation, solid sales (especially in the spring and summer seasons of 2025), and gradually rising inventory leading to a less frenzied market. Calgary could end up as a real estate sweet spot: neither busting nor wildly booming, just sustainably growing. For homeowners, that’s reassuring; for prospective buyers, Calgary in 2025 offers opportunities without as much competition as last year, but you may face higher prices the longer you wait.

Montreal: Resilient and Affordable (by Comparison)

Current State: Montreal’s housing market has shown notable resilience and even growth through the high interest rate period, thanks to its relatively affordable prices and unique local dynamics. In March 2025, the average home price in the Montreal metro area was about \$568,600, up 6.9% from a year earlier. This is a stark contrast to the slight declines seen in Toronto and Vancouver. Montreal’s market cooled in 2022 like others did, but it rebounded in 2023 and maintained momentum into 2025. Sales volumes in Montreal have also been on the upswing. In the first quarter of 2025, sales were 10-30% higher year-over-year (the Quebec Federation of Real Estate Boards noted a 36% jump in January sales annually, though that compares to a particularly weak January 2024). The key point is that Montreal’s affordability (homes cost roughly half of Toronto’s on average) means buyers have more leeway to absorb rate increases. Quebecers also tend to use shorter-term mortgages (like 5-year terms are standard, but often with different structures like hybrid mortgages), and many were able to lock in low rates before increases.

By property type:

• Single-Family Homes: The average single-family house in Montreal was about \$671,600 in March 2025, up 7.7% year-over-year. These strong gains indicate that demand for family homes in Montreal exceeds the supply. Indeed, Montreal’s inventory of single-family homes has been quite low; in some suburban areas and desirable city neighborhoods (like the West Island or Plateau), multiple offers are still occurring. The sales-to-new-listings ratio in the Quebec City metro was in seller’s market territory with active listings at record lows in early 2025, and while Montreal (a larger market) has a bit more supply, it’s still tighter than historical norms. Bidding wars have been noted for some properties in Montreal and its suburbs. This competition is pushing prices higher. As long as demand outstrips supply in Montreal, prices will likely continue to rise. However, the pace might moderate if mortgage rates remain high, because even if cheaper than Toronto, a \$600k+ home is not cheap relative to local incomes.
• Condos: The average condo price in Montreal was around \$425,200, up 4.5% year-over-year. Montreal’s condo market is influenced by both local first-time buyers and investors, and by international buyers from Europe and other francophone countries (though foreign buyer numbers are relatively small and they’ve also been subject to bans/taxes). The condo price increase being a bit lower than houses suggests that segment is a tad cooler – likely because a lot of new condos have been built in Montreal in recent years (Griffintown, for example, saw a boom of condo towers). Indeed, rental vacancy rates have started to inch up in Montreal, implying the city’s rental stock growth is easing the crunch. The Montreal rental vacancy was extremely low (about 1.5%) in 2022, but by late 2024 it rose, and with more rentals coming, tenants got some breathing room. That didn’t immediately stop condo price growth, but it keeps it moderate. Montreal condos are still affordable in absolute terms compared to other cities, so many renters are taking the leap to buy a condo as their first home, which supports that market. Over the next year, expect Montreal condos to keep appreciating modestly – perhaps mid single-digit percentages – unless a big wave of new supply or economic shock hits.

Key Drivers in Montreal:

• Affordability & Local Demand: Montreal is simply more affordable, and that has insulated it. The Desjardins economics team highlighted that Quebec’s market stayed strong because of its better affordability – homeowners could handle rising rates more easily. The average mortgage in Montreal is smaller, and Quebec’s household debt levels are lower than in Ontario or B.C. This means fewer forced sales and more sustained buying power. Even with rate hikes, many Montreal buyers only had to adjust their expectations slightly, not abandon buying altogether. This fundamental affordability advantage will continue to buoy Montreal’s market. If interest rates drop in late 2025, Montreal could even see another mini surge in prices as more buyers qualify for larger loans, given that many buyers were at their maximum stress-test limits.
• Immigration and Population: Montreal benefits from immigration too, though Quebec sets its own targets that are generally lower per capita than the rest of Canada. Still, Montreal’s population is growing steadily. There is also a trend of young Ontarians moving to Montreal for cheaper housing and a vibrant city life (sometimes called “Ontario expats” in Montreal’s market). Additionally, international students contribute to rental demand in Montreal, as do non-permanent workers in its sizable AI and gaming industries. These trends keep the demand for housing persistent. One difference: Quebec did not experience the same insane investor speculation as Toronto/Vancouver, so there’s less of a speculative overhang to clear out now.
• Supply and Construction: Interestingly, Montreal saw a dip in housing starts in 2022-2023, but by late 2024/early 2025, builders ramped up activity again. In January 2025, housing starts in Montreal were up 112% year-over-year – a huge jump – even as starts in Toronto were way down. This suggests developers in Quebec have confidence in the market’s strength and are responding by building more, especially rental apartments (rental construction is the strongest segment). Over the next year, Montreal will see more new rental buildings opening, which should gradually ease rent growth and could slightly increase condo inventory if investors decide to sell. However, new projects (condos or homes) still take time, so Montreal’s resale market will remain relatively tight in the near term. The city has some constraints (geography is less constrained than Vancouver, but political processes and labor shortages can slow construction). The good news for Montreal’s market stability is that increased construction means the supply will improve, preventing extreme price acceleration and keeping the market healthier.
• Government Policy in Quebec: Quebec has some unique housing initiatives – for example, Montreal has a Home Ownership Program offering financial assistance to first-time buyers of new constructions, and a province-wide affordable housing strategy. In late 2023, there were discussions in Quebec about instituting some form of housing speculation tax, but the focus has largely been on increasing supply of affordable housing. Also, unlike Toronto or Vancouver, Montreal didn’t implement a foreign buyer tax until the federal ban (which is now moot), so it avoided that complexity. The provincial government did support the federal move to slightly dial back immigration to relieve housing pressure. So policy-wise, Montreal will ride on the general Canadian trends (rates, immigration levels) while local authorities try to encourage more building and support buyers through grants.

Montreal 12-Month Outlook: The outlook for Montreal is continued steady growth. Quebec’s largest mortgage lender (Desjardins) indicated that even with uncertainties, they “expect Quebec’s real estate market to hold strong in the year ahead”. Price-wise, Montreal could see home values rise in the mid-single digits (perhaps ~4-6% year-over-year by spring 2026), outpacing inflation and most other regions. It’s a balanced optimism: Montreal’s market isn’t sky-rocketing, but it’s on solid footing. The main risk factor would be a worsening economy – since Quebec is an export-heavy economy, the trade war scenario or a recession could hit consumer confidence and employment, which in turn would slow sales. Desjardins warns that if the U.S. tariffs issue escalates and impacts jobs, Quebec’s housing activity could ease up. However, even in a mild recession, Montreal’s affordability provides a buffer against price declines (people are less leveraged). So the likely scenario is Montreal remains a seller’s market in 2025, though perhaps edging toward balanced if more listings appear. Buyers will find they don’t face as crazy bidding wars as in 2021, but they should still act decisively because good properties move fast. Sellers, meanwhile, can be confident that if they price reasonably, they will find buyers, especially given Montreal’s lingering “pent-up demand” from those who sat out the hectic pandemic market. In summary, Montreal is set to be one of Canada’s more positive real estate stories in the coming year – a market that is growing at a sustainable clip, supported by fundamentals, and offering a measure of accessibility that Toronto and Vancouver currently lack.

Conclusion: A Balanced, Data-Driven Outlook

The Canadian housing market in the next 12 months will be shaped by a tug-of-war between opposing forces. High interest rates and economic uncertainty are pulling downward, cooling demand and prices particularly in the high-priced markets of Toronto and Vancouver. At the same time, strong population growth, improving affordability (via rate relief), and chronic supply shortages are pulling upward, supporting markets like Calgary and Montreal and putting a floor under declines elsewhere. We anticipate a period of relative balance – neither a boom nor a bust on a national level. As one housing economist noted, “absent any major economic shock, we’d expect housing market demand and supply to stay balanced… yielding minimal price increases Canada-wide”. That captures the essence: broadly flat or gently rising prices, with regional variations.

To summarize the city outlooks in a comparative snapshot, here is a table of key metrics and forecasts:

City	Avg Home Price (Mar 2025)	YoY Price Change	Condo Market Trend	Detached Market Trend
Toronto (GTA)	~\$1,093,000 (avg)	-2.5% YoY (benchmark -3.8%)	Soft – Condo prices down ~1-2% and many new units hitting the market; high inventory. Ron Butler warns of an ongoing condo “freefall”.	Stable to slight dip – Detached prices down a few % YoY; demand muted but expected to improve if rates ease. Likely flat by year-end.
Vancouver (Metro)	~\$1,190,900 (benchmark)	-0.6% YoY	Balanced – Condo prices ~flat (−0.9% YoY); inventory up, sales steady. Rents have dipped ~6%, easing investor pressure. Outlook: modest growth late 2025 if no shocks.	Weak-balanced – Detached prices edging down (sales-to-list ~9%); buyers have upper hand now. Could stabilize with lower rates.
Calgary	~\$583,400 (avg)	+1.7% YoY	Strong – Condo avg \$342k, +2.3% YoY; demand from first-timers remains high. Ample new condos coming keeps gains moderate.	Strong – Detached avg \$698k, +4.4% YoY; seller’s market conditions. Forecast ~3% price growth in 2025 toward a more balanced market.
Montreal	~\$568,600 (avg)	+6.9% YoY	Solid – Condo avg \$425k, +4.5% YoY; sustained by affordable entry point. Supply of new condos growing but not overbuilt.	Solid – Single-family avg \$672k, +7.7% YoY; low listings keep competition up. Expected to continue rising, but maybe at a tempered pace if rates stay high.

Sources: Local real estate boards and market reports; forecasts from RBC, CREB, and Desjardins.

Overall, Canada’s housing sector is entering 2025 on a note of caution, but with resilience underpinned by fundamental demand. As Ron Butler has emphatically pointed out, there are segments of real trouble – especially the condo markets that “built on overconfidence” – and those will continue to correct. “It’s a classic pricing mistake… of frightening magnitude,” Butler says of the speculative condo boom, and the unwinding of that mistake will take much of 2025 to play out. Yet, outside of those pockets, the broader market is not collapsing; rather it’s recalibrating. Buyers in 2025 will find more choices and fewer bidding wars than in recent years, plus a bit more bargaining power – a welcome change. Sellers, if realistic, can still find solid prices for their properties, especially as population growth fills in the demand.

In the coming 12 months, keep an eye on the Bank of Canada announcements (rate changes can swiftly shift buyer sentiment), federal immigration policy adjustments, and any new housing supply initiatives rolling out in your city. Each of these economic and policy drivers can tilt the balance. By this time next year, we expect to report a Canadian housing market that has navigated a soft landing: avoiding the extremes of runaway prices or a steep crash, and instead charting a middle path where affordability slowly improves and supply and demand move closer into alignment. For Canadians, that balanced outcome would be a much-needed breath of fresh air in a housing discussion often dominated by extremes. As the data and expert commentary suggest, 2025 could be the year the housing market finally finds a bit of equilibrium – a hopeful sign for the stability of homes and communities across the country.