05/22/2025
Home Sales in Canada: A Mixed Bag for 2025
It appears that the rebound in home sales in Canada isn’t as straightforward as many hoped. The Canadian Real Estate Association (CREA) has revised its 2025 housing forecast, anticipating fewer home sales and lower prices due to uncertainties surrounding tariffs and potential economic disruptions.
According to the latest forecast, CREA expects 50,000 fewer home sales in 2025 than previously estimated, bringing the total expected sales to 482,673, which is similar to 2024 levels. Additionally, the average home price is projected to be $30,000 less than earlier predictions, landing at around $687,898.
Shaun Cathcart, CREA’s Senior Economist, noted that the current forecasting challenges are reminiscent of the early days of the COVID-19 lockdowns, indicating significant changes in a short time.
Key Housing Data from March:
- Home sales dipped by 4.8% compared to February.
- New property listings increased by 3% month-over-month.
- The MLS® Home Price Index (HPI) fell by 1% from the previous month and is down 2.1% year-over-year.
- March home sales reached levels not seen since the 2008 financial crisis.
The decline in home sales is primarily driven by tariff uncertainties, but the economic fallout is now a significant concern. Ontario and British Columbia experienced notable drops in sales, while overall, national home sales are down 20% since November 2024.
Interestingly, more Canadians are listing their homes as new supply rose by 3% in March. This increase is providing buyers with more options, leading to a sales-to-new-listings ratio of 45.9%, which is below the long-term average of 54.9%. A ratio under 45% typically indicates a buyer’s market, where buyers have more leverage.
Continued Price Declines:
The national average home price was $678,331 in March 2025, reflecting a 3.7% decrease from March 2024. Prices have dropped significantly in British Columbia and Ontario, while some areas in the Prairies, Quebec, and the East Coast have seen increases.
CREA’s initial forecast for 2025, released in January, anticipated a more dynamic housing market. However, recent economic actions from the U.S. have influenced Canada’s strategy and buyer confidence, prompting this revision.
Looking forward, CREA expects home sales to remain flat in 2025 compared to 2024, with Newfoundland and Labrador, Quebec, and Prince Edward Island projected to see the most gains. In contrast, Ontario and British Columbia are expected to experience declines.
For those in New Brunswick, Newfoundland and Labrador, and Alberta, home prices are forecasted to rise, while the overall national sale price may decrease by 0.3%.
Valérie Paquin, the new Chair of CREA’s Board of Directors, emphasized the importance of understanding regional markets for anyone looking to buy or sell in 2025. She advises connecting with a local REALTOR® to navigate the evolving landscape effectively.
In summary, while some regions may flourish, others are grappling with challenges ahead. The housing market remains complex, and staying informed is essential.
