As we look ahead to 2025, Canada’s housing market is poised for a period of transition. According to the latest data from the Canada Mortgage and Housing Corporation (CMHC), several key economic trends—including foreign trade risks, shifting immigration patterns, and changes in housing construction—are shaping the real estate landscape across the country.

If you’re a homeowner, investor, or potential buyer, here’s what you need to know about the road ahead.

CMHC anticipates a modest pace of economic growth in 2025, largely due to global trade uncertainties and adjustments in immigration policy. However, the outlook improves beyond next year, with stronger economic fundamentals expected in 2026 and 2027, supporting more robust housing activity in the longer term.

While total housing starts are forecasted to decline slightly between 2025 and 2027, they will remain above the 10-year average. The slowdown will be driven primarily by a decline in condo construction, particularly in high-density urban centres like Toronto and Vancouver.

That said, rental apartment construction remains strong, especially in cities with high population growth and affordability pressures. However, CMHC notes that this too may begin to moderate by 2027 as demand stabilizes.

Detached homes, semis, and row houses—collectively known as ground-oriented housing—could experience a modest recovery, especially in more affordable categories like row houses. With growing demand for family-friendly spaces and a potential shift in buyer preferences due to lower borrowing costs, this segment is worth watching in suburban and mid-sized markets like London, Ontario, Hamilton, and Durham Region.

With mortgage rates expected to decline and changes to mortgage qualification rules potentially unlocking pent-up demand, the housing market is likely to see a short-term rebound in both sales and prices. For buyers who have been sitting on the sidelines due to affordability constraints, this could be a window of opportunity.

In the longer term, CMHC projects a steady recovery supported by stronger economic conditions and continued population growth. However, this recovery may be uneven—more robust in affordable regions and slower in less affordable urban centres and the condo market, where supply is still catching up with shifting buyer demand.

After years of tight rental supply and steep rent increases, Canada’s rental markets may finally start to loosen. CMHC expects higher vacancy rates in the latter half of the forecast period, which could slow rental price growth, especially in cities where significant new rental supply is coming online.

This could provide some relief for renters, particularly in high-demand areas like Toronto, Ottawa, and Vancouver, although any easing will likely be gradual and localized.

Whether you’re thinking about buying your first home, investing in a rental property, or downsizing in the next few years, understanding these trends is key to making informed decisions.

✅ Buyers: Watch for lower mortgage rates and new mortgage rules that could improve affordability. Be strategic—look beyond major metro areas for better value.

✅ Sellers: Expect more competition as supply slowly increases. Proper pricing and home preparation will be key to standing out.

✅ Investors: Keep an eye on the rental market. New supply could soften returns in some areas, but strong long-term demand still underpins the sector.

Canada’s real estate market is adjusting to a complex mix of global economic forces, policy changes, and shifting demographics. While 2025 may bring modest growth, the stage is being set for a more stable, sustained recovery through 2026 and 2027. Whether you’re planning to buy, sell, or invest, understanding these shifts will help you make confident, informed decisions.

Need guidance? Our agents at Shrine Realty Brokerage Ltd. are here to help you stay ahead of market changes and find the right opportunity for your next move.