The Canadian Real Estate Association (CREA) has significantly cut its forecast for 2025 home sales, citing persistent concerns among buyers over tariffs and interest rates.

In a major revision — CREA’s most substantial between-quarter adjustment since the 2008–2009 financial crisis — the association now predicts 482,673 residential property sales in 2025. This is almost unchanged from 2024 levels and represents a sharp downgrade from the 8.6% growth CREA had forecast in January.

“Uncertainty around tariffs has been the main driver behind the slowdown in home sales,” said Shaun Cathcart, CREA’s senior economist. “What once looked like a sure-fire rebound year has turned into a scenario where simply maintaining momentum is a challenge.”

Data released Tuesday showed that March home sales dropped 9.3% compared to the same month last year, marking the weakest March since 2009. On a seasonally adjusted basis, sales also fell 4.8% compared to February, continuing a downward trend that began last November — with total sales down 20% since that peak.

“The dominant trend right now is uncertainty,” commented Katy Mackenzie, a mortgage broker with The Mortgage Group in Vancouver. “Many buyers are hitting pause on their home search.”

While the national average home price ticked up 0.3% from February to March, it remains 3.7% lower than one year ago. CREA now expects the national average home price to fall 0.3% in 2025 to $687,898 — about $30,000 lower than its January projection. Average prices in British Columbia and Ontario are expected to dip slightly, whereas other provinces may experience gains of 3% to 5%.

Mackenzie noted that while lower prices could benefit first-time homebuyers by reducing the mortgage needed, they pose challenges for homeowners looking to downsize in retirement.

“The idea of selling for less is tough for many retirees,” she said.

The CREA report also highlighted a 3% increase in new home listings from February to March. However, with sales declining, the sales-to-new listings ratio dropped from 49.7% to 45.9%, the lowest since February 2009.

Mackenzie added that the market dynamics vary: some buyers face limited property options, while others encounter multiple-offer situations. Meanwhile, savvy investors are taking advantage of lower prices and more room for negotiation.

“Lower sales create more negotiation power for buyers,” she said.

Amid market instability, Mackenzie emphasized the importance of long-term planning.

“My advice is always: Do you have a plan? Can you afford it? Do you qualify? How will it fit your life three to five years down the road?” she said. “Having a broader plan helps you ride out short-term market changes with less worry.”

Canadian Real Estate Association downgrades sales forecast for 2025 as buyers remain wary - The Globe and Mail

For several years, there has been widespread public support for taxing and restricting foreign homebuyers.
However, with economic uncertainty, rising tariffs, and volatility in global stock markets further slowing an already weak local pre-sale condo market and delaying purpose-built rental projects, discussions about the advantages and disadvantages of adjusting foreign buyer rules have resurfaced.

Current Landscape of the Discussion

The conversation around foreign buyers is unfolding across the development industry, the federal election scene, and academic circles.

What Are the Current Rules?
At the federal level, Canada has a two-year ban (extended until January 2027) on non-Canadians purchasing residential properties in major urban centres and nearby regions.
In British Columbia, the NDP government raised the foreign buyers' tax to 20% in 2017 and introduced additional speculation and vacancy taxes.

Industry Perspectives
An increasing number of real estate professionals are advocating for partially reopening the market to foreign investors to help fund complex, higher-cost developments.
In March, Vancouver real estate marketer Bob Rennie proposed a model where both local and foreign investors could contribute to building long-term rental housing—on the condition that they commit to holding these properties for at least 25 years.

This strategy could provide developers with the capital needed to move projects forward. Currently, developers struggle to secure enough presale buyers to launch condo construction, and building purpose-built rental units remains challenging due to the higher upfront cash requirements.

“If governments aren’t willing to lower their fees or ease building regulations, I’ve been advocating for allowing foreign investment in new homes again,” said Evan Allegretto, B.C. president of Vancouver-based Intracorp Homes.

“Most of these homes eventually enter the rental market anyway. Allowing foreigners to purchase new homes—similar to what Australia recently implemented—could inject the necessary capital to speed up project starts.”

In response to soaring housing prices, Australia recently introduced a two-year ban on foreign purchases of existing homes, while still permitting foreigners to buy new properties.

Balancing Protection and Capital in the Housing Market

Allowing selective foreign investment could protect parts of the local market from price surges while injecting much-needed capital into new developments, explained Evan Allegretto of Intracorp Homes.

Brent Sawchyn, CEO of Vancouver-based PC Urban, also supports adjusting foreign buyer rules. He noted that developers like PC Urban often work around current restrictions by investing more upfront, negotiating for policy changes, requesting minor density increases, or deferring development charges to keep projects viable.

Federal Political Party Positions

• NDP: Leader Jagmeet Singh advocates for a permanent ban on foreign homebuyers to prevent speculative price increases.

• Liberals and Conservatives: Neither party has officially commented on modifying foreign buyer rules. Although Bob Rennie has discussed a rental investment model with Liberal figure Mark Carney, no formal position has been announced. Both parties declined to respond to Postmedia inquiries.

Public Opinion
A March survey of 796 British Columbians by Research Co. found that 75% support a two-year ban on non-Canadians buying residential properties.
However, support for proposals allowing foreign investors to fund rental housing was not measured.

In a national poll from early April:

• 25% of voters aged 18–34 ranked housing as the most important issue, compared to 12% of older voters.

• Younger voters, more concerned about affordability, are less likely to favor models that involve enabling foreign investors to become landlords, noted Mario Canseco, president of Research Co.

Academic Perspective
A recent paper in the Journal of Ethnic and Migration Studies argues that restrictions on foreign capital have helped moderate price increases in cities like Vancouver.

Andy Yan (SFU City Program), Joshua Gordon (McMaster University), and David Ley (UBC) suggest:

• Bans targeting foreign money flows are different from policies simply restricting foreign buyers based on citizenship.

• Australia’s approach—allowing foreigners to buy only new properties while maintaining strict oversight—is more robust than Canada’s looser system.

Yan warned that allowing foreign investment to fund private rental developments risks repeating the failures of previous immigrant investor programs, which were criticized for lacking the promised economic benefits and being prone to abuse.

Is it time for Canada to relax restrictions on foreign buyers and investment in real estate?

Bank of Canada Pauses Rate Cuts: What This Means for Homeowners and Buyers

After seven consecutive interest rate cuts, the Bank of Canada announced on Wednesday, April 16, 2025, that it will maintain its policy interest rate at 2.75%. This marks the first time in over a year that the Bank has opted not to adjust the rate, signaling a shift toward caution amid rising global uncertainty.

Just one year ago, the policy rate stood at 5%. The series of cuts since then has brought much-needed relief to Canadian homeowners and prospective buyers, making home ownership more attainable and reducing borrowing costs—particularly for those with variable-rate mortgages.

Why Has the Bank Chosen to Hold the Rate?

In its official statement, the Bank cited growing economic uncertainty stemming from escalating global trade tensions—particularly due to unpredictable policy shifts by the United States. Tariffs on products like steel, aluminum, and automobiles have increased costs and created instability, complicating projections for inflation and GDP growth.

The Bank’s Monetary Policy Report outlines two potential outcomes:

1. Trade tensions gradually ease, supporting economic recovery by late 2026; or

2. A prolonged trade conflict leads to rising inflation and potentially triggers a recession in Canada.

Given these risks, the Bank of Canada is taking a cautious approach, balancing signs of economic resilience against the threat of external disruptions.

Why This Matters for Home Buyers

Although the Bank did not introduce another rate cut, interest rates remain historically low. This pause may indicate a near-term stabilization in borrowing costs, which is important for anyone considering homeownership or refinancing.

If you’ve been waiting for the right time to secure a mortgage, this may be an opportune moment to act. As of April 16, five-year fixed mortgage rates start at approximately 3.87%, according to REALTOR.ca’s Mortgage Qualification Tool. These rates—linked more closely to long-term bond yields than to the BoC’s policy rate—are still influenced by inflation expectations and global financial trends.

Impact on the Canadian Housing Market

The Canadian Real Estate Association (CREA) has revised its housing market forecast in light of current conditions. Home sales for 2025 are now projected at 482,673 units, roughly the same as 2024, and 50,000 fewer than originally anticipated. The national average home price is also expected to be lower than initially forecast, settling around $687,898—approximately $30,000 less than earlier predictions.

Market momentum may remain subdued until trade uncertainties are resolved and consumer confidence rebounds—factors that could take months to stabilize.

The Role of a REALTOR® in Times of Uncertainty

Navigating real estate decisions amid fluctuating interest rates can feel overwhelming. This is where working with a REALTOR® becomes especially valuable.

• For Buyers: A REALTOR® can set up tailored property searches, attend open houses on your behalf, and leverage their professional network to uncover off-market opportunities—giving you a competitive edge when timing matters most.

• For Sellers: A REALTOR® can begin preparing and marketing your home right away, from staging advice to gathering key documentation, all while minimizing disruption to your daily life.

With real estate markets closely tied to interest rate trends, having a knowledgeable REALTOR® by your side ensures you're making informed decisions, whether you're buying, selling, or simply planning your next steps.

Bank of Canada Pauses Rate Cuts—How Home Buyers Are Affected

It may feel like just yesterday we were lining up for toilet paper, clanging pots in support of healthcare workers, and scrambling to find N-95 masks—but it’s now been five years since the onset of the COVID-19 pandemic.

Like nearly every part of our lives, Canada’s housing market experienced major disruptions during that time. While some changes were short-lived, others have had a lasting impact and continue to influence the market today.

Now, five years later, we’re reflecting on key milestones and trends that have shaped Canada’s real estate landscape since the pandemic began—and exploring how its long-term effects may continue to influence the future of housing across the country.

2020: A Year Marked by Housing Market Uncertainty
The onset of the pandemic in 2020 brought widespread anxiety and disruption to nearly every sector of Canada’s economy—and real estate was no exception.

As the country grappled with the initial shock of COVID-19, the resulting economic instability, lockdowns, and public health restrictions brought real estate activity to a near standstill during the early months of the year.

Nationally, both home sales and prices saw unprecedented drops. Media headlines swung between grim forecasts and cautious optimism about an eventual rebound once things returned to “normal.” Despite the challenges, innovations like virtual home tours allowed buyers to continue their search from a distance.

“As with so many aspects of daily life, housing market activity across Canada largely hit pause,” said Shaun Cathcart, Senior Economist at CREA, in May 2020. “However, early data from May hinted that both sales and new listings were beginning to show signs of life.”

As pandemic restrictions pushed more Canadians to work remotely, homebuyers and renters quickly began rethinking their priorities. Almost overnight, demand shifted away from dense urban centers to suburban and rural areas, where people sought larger living spaces, home offices, and more amenities.

But in a dramatic turnaround, the easing of lockdowns in the latter half of the year unleashed a wave of pent-up demand. What started as a market slowdown turned into a surge, with both sales and prices climbing steadily for six consecutive months.

“Toward the end of 2020, low interest rates spurred a buying frenzy, pushing home prices upward,” says Jill Warr, REALTOR® with Jill Warr Realty (Sutton Group Old Mill Realty) in Toronto. “The shift to remote work drove many to larger homes outside the city, and virtual showings and digital deals quickly became standard practice.”

2020 Milestones:

• In April, home sales plummeted 58.4% from March (seasonally adjusted), but by July, they had surged 28.6% month-over-month.

• By year-end, home sales were up 12.7% over 2019, hitting a record 561,000 residential transactions.

• New listings declined 4.3% year-over-year.

• Average home prices nationwide rose 13% to an all-time high of $571,346.

2021: A Record-Breaking Year for Sales and Prices

Following the market volatility of 2020, many hoped 2021 would bring a sense of stability to Canada’s housing sector. While activity initially began to cool by mid-year—with sales declining year-over-year—momentum picked up once again in the second half, ultimately turning 2021 into another record-setting year.

Home sales soared, fueled by low interest rates and growing buyer demand, while the number of available properties fell to historic lows by year’s end. The worsening housing shortage became a central issue in the 2021 federal election, prompting all major political parties to spotlight housing affordability in their platforms.

“Price growth continued its rapid climb in 2021,” says Jill Warr. “Buyers were gripped by FOMO as low borrowing costs and competitive bidding drove up demand. Investor activity surged, adding further pressure to the market.”

Shaun Cathcart, Senior Economist at CREA, reflected in April 2021: “In 2020, the home became everything. So it’s no surprise that those without a place of their own were eager to buy, while existing homeowners were hesitant to sell. As the pandemic’s uncertainty begins to fade, we may see more sellers return to the market—while some of the urgency among buyers may also ease.”

The relocation trend that began in 2020 expanded into a full-scale migration in 2021. Motivated by lingering pandemic concerns and the normalization of remote work, thousands of Canadians left crowded urban centers in search of more space, quieter lifestyles, and closer proximity to nature.

This movement sparked a surge in demand for single-family homes, driving significant price increases in suburban and rural regions. The East Coast, in particular, saw a wave of new residents seeking affordability and a slower pace of life.

“One of the most notable trends early in the pandemic was the migration to Nova Scotia,” says Brenda Kielbratowski, REALTOR® and CEO of the Halifax Home Selling Group. “It offered a more relaxed lifestyle at a lower cost compared to cities like Toronto or Vancouver.”

She adds, “Buyers who sold their homes at high prices in major cities often came with the ability to make strong offers. Meanwhile, those priced out of urban markets turned to more affordable options like semi-detached homes or condos in smaller communities.”

Fueled by this influx, Halifax saw its average home price jump nearly 50%—from $329,482 in December 2019 to $489,933 by December 2021.

2021 Housing Market Highlights:

• Inventory was exceptionally low, with only 68,000 active listings available going into 2022—among the tightest market conditions ever recorded.

• A record-breaking 677,500 homes were sold in 2021, surpassing the previous year’s total by over 115,000 sales.

• New listings dropped 15% year-over-year by December 2021.

• The national average home price surged by 21.3%, reaching a historic high of $693,106.

• Nearly two-thirds of real estate markets across the country were classified as sellers’ markets.

2022: Inflation, Interest Rate Hikes, and Affordability Challenges

Following the record-breaking momentum of 2021, Canada’s housing market slowed significantly in 2022. Home sales declined steadily throughout the year, and by September, activity was 11% below the 10-year pre-pandemic national average. Despite the drop in sales, limited inventory kept home prices elevated across much of the country.

The year was defined by two key economic factors: soaring inflation and the Bank of Canada’s rapid interest rate increases. These challenges were intensified by global instability—including the war in Ukraine—and lingering uncertainty from emerging COVID variants. As interest rates climbed, concerns about affordability, especially in high-cost cities like Toronto and Vancouver, grew louder—particularly for first-time buyers.

“By 2022, affordability concerns worsened,” says REALTOR® Jill Warr. “As prices for single-family homes surged, many buyers began turning toward more budget-friendly condos. The market remained resilient, but activity clearly slowed.”

The affordability crisis dominated public discourse and political debate. In response, governments at both the federal and provincial levels introduced measures aimed at curbing speculation, limiting foreign investment, and increasing housing affordability.

“There were fewer homes on the market than ever before,” noted CREA economist Shaun Cathcart in January 2022. “Unless bold action is taken to increase housing supply, the affordability issue will only worsen. A national effort to build homes on an unprecedented scale is what’s truly needed—minor adjustments won’t be enough.”

2022 Milestones:

• Home sales fell to 506,924—a 25% decline from 2021, reflecting the impact of higher interest rates.

• Despite the slowdown, home prices hit new highs, with the national average reaching $709,706.

• The Bank of Canada’s policy rate jumped from 0.25% in January to 4.25% by December, making borrowing significantly more expensive.

2023: A Year of Market Cooling and Rebalancing

By 2023, the immediate disruptions of the pandemic had largely faded, but its influence on the housing market remained.

“Interest rate increases continued to cool the market in 2023,” says REALTOR® Jill Warr. “Bidding wars became less common, and many sellers—hoping to benefit from previously high prices—helped increase inventory, leading to a more balanced market overall. Hybrid work arrangements kept demand steady in both urban and suburban areas, while home prices remained relatively stable.”

As COVID-19 restrictions were lifted nationwide, many provinces experienced an “urban renaissance,” with some former residents returning to major cities after relocating during the pandemic.

With the economy regaining strength, housing activity began to recover. Even with ongoing interest rate hikes, many regions approached pre-pandemic levels of home sales and buyer activity.

“It was clear that if buyers re-entered a market with limited supply, prices would respond accordingly—and that’s exactly what we saw in April,” noted CREA economist Shaun Cathcart in the May 2023 Housing Market Report. “It didn’t match the explosive pandemic growth, but it was still one of the stronger rebounds we’ve seen historically.”

2023: A Market of Two Halves—Early Surge, Late-Year Cooldown

The year began with a noticeable uptick in home sales and rising prices, sparking cautious optimism. However, by year’s end, the market showed signs of softening, with both sales and prices declining quarter over quarter.

As many companies transitioned from fully remote setups to hybrid work models, Canadians grappled with new lifestyle demands. REALTORS® found themselves helping clients navigate competing desires—urban convenience versus suburban space.

“The rise in December home sales wasn’t quite the start of a full recovery,” said CREA economist Shaun Cathcart in January 2024, reflecting on year-end data. “It was more a result of buyers and sellers adjusting their expectations to get deals done before the close of the year. We still expect a rebound in 2024, but it’ll take a few more months to see how that unfolds.”

2023 Milestones:

• A total of 449,984 homes were sold—down 11.2% from 2022.

• The average home price declined 3.8% year-over-year, settling at $682,748.

• Active listings heading into 2024 stood at 117,309, marking a 72% increase from two years earlier.

2024: A Return to Stability and a Renewed Push for Affordability

The early months of 2024 saw relatively flat home sales and prices. However, a series of six interest rate cuts by the Bank of Canada in the latter half of the year sparked renewed activity, with both sales and prices climbing by year-end.

“Sales bounced back in 2024, largely thanks to falling interest rates and a renewed sense of confidence,” says REALTOR® Jill Warr. “In Toronto, sales rose by 2.6%, while prices dipped only slightly by 0.8%, reflecting a more stable, recovering market.”

This return to balance shifted the spotlight back to long-standing challenges in the Canadian housing market—particularly affordability and limited supply. These issues took center stage with the federal government’s launch of the Canada Housing Plan, an ambitious strategy to address the nation’s housing crisis. CREA welcomed the plan, emphasizing the need for broad collaboration.

“Canada’s housing problems didn’t appear overnight—they’ve been building for years,” said CREA CEO Janice Myers. “No single group can solve them alone. REALTORS® are ready to be part of a united, multi-pronged solution. For many young Canadians, homeownership feels like an unattainable dream—but it doesn’t have to be.”

While more people returned to office-based work, remote and hybrid arrangements remained common. As a result, buyers continued to prioritize homes with added space and flexible layouts that support this new way of living.

2024 Milestones:

• Q4 home sales jumped more than 25% year-over-year, closing the year strong.

• Total home sales reached 482,796.

• The average home price for the year was $689,822.

• Active listings rose to 124,663, a 6.3% increase over the previous year, though still below the historical norm of 150,000.

2025 and Beyond: The Lasting Legacy of the Pandemic on Real Estate

The COVID-19 pandemic profoundly reshaped Canada’s economy and transformed how we view homeownership and where we choose to live. But which of those changes will leave a lasting mark on the housing market in the years—or even decades—ahead?

Although each year since 2020 has brought its own set of challenges and shifts, several key trends that emerged during the pandemic continue to shape real estate across the country today:

• Continued demand for larger homes with dedicated office space, driven by remote and hybrid work arrangements.

• Ongoing migration to suburban and rural areas, enabled by greater flexibility in where people can live and work.

• A shift away from seasonal buying patterns in favor of a more consistent, year-round housing market.

• The widespread adoption of digital tools like virtual tours and online transactions, now standard in the home buying and selling experience.

These lasting changes suggest that, while the pandemic may be behind us, its influence on housing preferences, market dynamics, and how we do business in real estate is here to stay.

2025: Outlook and Emerging Challenges

Despite hopes for a more stable housing market this year, growing tensions from a trade war with the United States have introduced new uncertainty. While interest rates have dropped to their lowest levels in years, their impact has been mixed. January saw a surge in new listings—up 14.8%—but that momentum quickly reversed in February, as newly listed properties fell 12.7% month-over-month. CREA’s Shaun Cathcart described the decline as “significant but hardly surprising” in light of the economic uncertainty caused by new tariffs.

“The market is far more balanced today compared to the dramatic swings of the past five years,” says REALTOR® Jill Warr. “We’ve moved from boom, to cooldown, and now toward a more stable environment shaped by shifting economic policy and evolving buyer expectations.”

She adds, “Lower interest rates, increased inventory, and lessons learned during the pandemic have contributed to greater stability. Affordability challenges remain, but overall, the market is becoming healthier and more sustainable.”

CREA’s 2025 Forecast

• A federal election is underway, and housing remains front and center for all major parties.

• Regional differences will shape activity: Ontario and B.C. are expected to see the biggest sales rebounds, while Alberta and Saskatchewan lead in price growth.

• National home sales are projected to rise by 8.6%, reaching 532,704 units.

• The average home price across Canada is forecast to increase 4.7%, hitting $722,221.
  (Note: This forecast was issued prior to the onset of the trade war.)

Five Years Later: How Pandemic Trends Are Still Affecting Canada’s Housing Market - REALTOR.ca Blog