Canadian Real Estate Price Watch
As summer winds down and the Canadian housing market prepares for its traditional fall activity surge, the overall tone remains one of cautious adjustment rather than rapid change. The pandemic-era frenzy has been replaced with a more measured environment, where buyers are taking their time, sellers are recalibrating expectations, and investors are scrutinizing deals more closely than they have in years. According to the CMHC’s summer outlook, national average prices are expected to decline by around two percent in 2025, with the most notable pullbacks happening in Ontario and British Columbia’s high-priced metropolitan areas. Recovery, if it comes, is expected to be slow, with most forecasters pointing to 2026 as the earliest point for any significant upswing.
Real Estate Watch – Where Are Prices Headed
Part of the reason for this subdued forecast lies in the macroeconomic backdrop. Persistent trade tensions — most visibly in the form of U.S. tariffs—are filtering into household sentiment, discouraging major purchases. Prospective buyers are wary of making long-term commitments in an environment where job security and cost-of-living pressures remain front of mind. These concerns have been compounded by a slowdown in housing construction. Elevated building costs, rising financing expenses for developers, and overall economic caution have prompted a slowdown in new housing starts, leading CMHC to reduce its projections through 2027. In normal times, restricted supply would be expected to push prices upward, but in today’s market, softer demand is counterbalancing that supply-side pressure.
Regional variation is another defining characteristic of the current housing market. Alberta and Quebec, benefiting from stronger relative affordability and, in Alberta’s case, a steady influx of interprovincial migrants, are faring considerably better than their more expensive counterparts. These provinces are seeing steadier sales activity, and in some local markets, modest price increases. In contrast, urban centres like Toronto, Vancouver, and Victoria remain in a prolonged cooling phase. Here, high home values—even with mortgage rates slightly lower than last year—continue to weigh heavily on affordability, meaning that any demand recovery is likely to be gradual and uneven.
For buyers, this evolving landscape presents both opportunities and challenges. On one hand, slower price appreciation and the potential for further interest rate cuts by the Bank of Canada later this year could make homeownership more accessible than it has been in recent years. The pace of transactions has slowed, giving buyers more room to negotiate and conduct due diligence without the pressure of bidding wars. On the other hand, broader economic uncertainty means that entering the market should be done with a clear, long-term plan rather than short-term speculation.
Sellers, too, are adjusting to the new reality. While properties in sought-after neighborhoods or with unique features are still attracting attention, the days of routinely achieving sales well above list price are largely over in most markets. Sellers are being advised to price homes realistically, ensure properties are well-presented, and be prepared for longer listing times. For some, delaying a sale until conditions improve in 2026 may prove to be the better strategy—particularly if they have flexibility in their timing. Investors face their own set of considerations. The current climate is less about chasing broad market appreciation and more about identifying specific opportunities where fundamentals are strong. Rental markets in cities with tight vacancy rates continue to offer stable income potential, though rising operating costs and changing regulations require careful management. The key for investors in the months ahead will be to focus on cash flow, location resilience, and a clear understanding of local economic drivers.
In short, Canada’s housing market is in a period of recalibration. It is neither in crisis nor poised for an immediate boom, but rather working through a transition toward greater stability. For buyers, sellers, and investors alike, this pre-fall period is an opportune moment to take stock, review financial and real estate strategies, and align plans with both current realities and future expectations. With thoughtful preparation and professional guidance, participants in today’s market can position themselves to take advantage of the opportunities that will emerge when conditions shift again in 2026 and beyond.
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