As Canada enters the second half of 2025, the national housing market is showing signs of strain and uncertainty. Recently published data and forecasts from the Canadian Real Estate Association (CREA), Canada Mortgage and Housing Corporation (CMHC), and expert commentary from True North Mortgage indicate a fragile outlook for home prices, sales volumes, and construction activity.
Below is a comprehensive summary of the key trends shaping Canada's housing market in 2025.
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CREA's 2025 Forecast: Downgrade in Sales and Price Expectations
In a significant revision, the Canadian Real Estate Association (CREA) has downgraded its national housing market forecast for 2025. CREA now predicts that only 482,673 homes will be sold across Canada this year, which marks a substantial downward revision of 50,000 fewer sales compared to its earlier January forecast.
“50,000 fewer home sales in 2025” – a clear indicator of weakening demand across several regions.
CREA has also revised the national average home price for 2025 down by approximately $30,000, now expected to reach $687,898, a modest 0.3% decrease compared to previous estimates.
“Average price expected at $687,898, down from earlier projections” – suggesting a market correction rather than a collapse.
The association attributes this cooling to a mix of factors, including inflation concerns, high mortgage rates, and potential economic stagnation. These headwinds are discouraging both buyers and sellers, leading to decreased transaction volumes.
True North Mortgage: Divergent Forecasts Among Experts
True North Mortgage highlights the divergence in expert opinions on where the market is headed. While CREA adopts a cautious tone, other forecasters offer mixed views:
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Royal LePage projects a 5% increase in home prices by the end of 2025, slightly lower than its previous estimate of 6%.
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TD Economics predicts a 3.2% drop in prices and a 0.9% decrease in sales, reflecting pessimism due to persistent affordability challenges.
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Rosenberg Research anticipates a 1.5% price decline, citing macroeconomic risks.
“Expert opinions range from +5% growth to –3.2% decline in prices” – illustrating significant uncertainty in market direction.
Despite varying predictions, all forecasters agree on one thing: interest rates and broader economic conditions will play a critical role in determining how the market evolves through the rest of 2025.
CMHC 2025 Housing Outlook: Scenario-Based Projections
Canada Mortgage and Housing Corporation (CMHC) has taken a scenario-based approach to its 2025 Housing Market Outlook, offering low, medium, and high forecasts depending on economic and policy developments.
Under its medium-growth scenario, CMHC foresees:
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A moderate rebound in housing sales and prices, primarily in affordable regions like Alberta and Quebec.
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Continued softness in overheated markets such as British Columbia and Ontario, where affordability pressures remain high.
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A slowdown in new housing starts, particularly in multi-unit projects like condominiums, though ground-oriented home construction may hold steady.
“CMHC expects a regionally uneven recovery with affordability as a key factor” – highlighting disparities between markets.
While CMHC anticipates some improvement due to expected interest rate cuts, it also warns of persistent risks, including:
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Potential trade tensions and tariff escalation
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Lower immigration targets reducing demand
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Volatile monetary policy from the Bank of Canada
“Tariffs, immigration policy, and rate fluctuations could significantly alter recovery path” – long-term risks remain front and center.
Key Trends to Watch
| Metric | Current Forecast | Change From Previous Outlook |
|---|---|---|
| Home Sales | 482,673 homes in 2025 | –50,000 from January CREA forecast |
| Average Home Price | $687,898 | –$30,000 (–0.3%) from earlier projection |
| Regional Variability | Strength in AB/QC, Weakness in BC/ON | Driven by affordability and demand |
| Housing Starts | Slight slowdown, especially in condos | Ground-oriented starts more stable |
| Key Risks | Tariffs, immigration levels, BoC policy | Could shift trajectory significantly |
Conclusion: A Market in Holding Pattern
Canada’s housing market in 2025 is not collapsing, but it is clearly no longer on a growth trajectory. The combination of economic headwinds, shifting consumer confidence, and policy uncertainty has created a fragile environment.
For prospective buyers and investors, the takeaway is to remain cautious. Regional dynamics, interest rates, and new immigration and trade policies will be the defining variables in the months ahead.
The market is not collapsing—but the recovery is slower and less certain than expected.