2025: A Look Ahead for Canada’s Housing and Mortgage Market

With interest rates shifting and market trends taking shape, this year promises to be pivotal for anyone navigating real estate.

As we step into 2025, Canada’s housing market is evolving, bringing a mix of challenges and opportunities for buyers, sellers, and investors. With interest rates shifting and market trends taking shape, this year promises to be pivotal for anyone navigating real estate. Here’s what you need to know to make informed decisions and stay ahead of the curve.

Interest Rates and Borrowing Costs

Last year marked a turning point, with the Bank of Canada moving from rate hikes to cuts. By the end of 2024, the policy rate had dropped to 3.25%, offering some relief to borrowers. The trend is expected to continue in 2025, with rates potentially falling to as low as 2.00%, depending on inflation and broader economic conditions.

Bond yields, which heavily influence fixed mortgage rates, are stabilizing. The five-year bond yield is projected to remain between 2.75% and 3.00%, creating a more predictable landscape for fixed-rate borrowers.

What this means for you:

• Lower interest rates are good news for those looking to borrow, but affordability remains a hurdle. If you’re considering buying a home or renewing a mortgage, acting sooner rather than later might secure you the best terms.

Housing Market Projections

Home Sales: The Canadian Real Estate Association (CREA) is forecasting a 6.6% increase in home sales this year, with nearly 500,000 transactions expected. A notable rebound is anticipated by mid-year as affordability improves and buyer confidence strengthens.

Home Prices: Price growth projected by CREA: $713,375 (+4.4% YoY)

This uptick reflects pent-up demand and more favourable borrowing conditions, though some regions may see growth tempered by affordability challenges.

What this means for you:

• Buyers: The first half of the year may offer less competition and better deals before prices rise further.

• Sellers: Timing is everything. The anticipated rebound could help maximize the value of your property if you plan strategically.

Regional Highlights

National trends tell part of the story, but local dynamics will drive much of the action. Factors like inventory levels, migration, and regional economic shifts will play a big role in shaping individual markets.

What this means for you:

• Collaborate with your M broker to dive deep into your local market. Tailored advice can make all the difference, whether you’re buying, selling, or investing.

Affordability Challenges and Supply Constraints

Even as rates drop, affordability remains a significant concern. Limited housing supply, particularly in urban centers, continues to push prices higher. The gap between demand and available inventory underscores the need for careful planning.

What this means for you:

• Buyers: Take proactive steps like securing mortgage pre-approval or exploring alternative financing options.

• Sellers: High demand coupled with low supply creates an ideal environment to command strong returns on your property.

How M Brokers Can Support You

Navigating Canada’s housing market in 2025 doesn’t have to be overwhelming. Here’s how M Brokers can help:

• Market Expertise: We stay ahead of trends so you don’t have to, providing the latest insights to help you make confident decisions.

• Mortgage Guidance: Through partnerships with trusted mortgage professionals, we’ll help you find financing solutions that suit your needs.

• Strategic Planning: Whether buying, selling, or investing, we’ll work with you to craft a personalized strategy that aligns with your goals.

By staying informed and working with an experienced advisor, you can make the most of 2025’s real estate opportunities. If you have questions or need help with your plans, M Brokers are here for you every step of the way.