Current Market Conditions

The real estate market has started 2025 on a positive note, showing slight increased activity and optimism. Recent data shows a 12.4% increase in home sales compared to December 2024, accompanied by a rise in new active listings. The Bank of Canada’s recent decision to lower its policy interest rate by 25 basis points to 3% on January 29, 2025, has created a more favorable borrowing environment for homebuyers, injecting a fresh energy into the market, just in time for the competitive spring season.

Demand and Interest Rates

Lower interest rates are making mortgages more accessible, encouraging more buyers to enter the market. With the next rate announcement set for March 12, 2025, there is hope that another rate cut could further boost demand. The current CPI of 1.8% indicates we’re on track for a soft landing, and interest rates are expected to remain steady or decrease. This could foster a more stable environment for both the real estate market and businesses.

Supply of Homes

New active listings have increased modestly since December 2024, but overall housing supply could be influenced by construction trends. If new home construction slows due to rising material costs, inventory may tighten, leading to more competition among buyers. Additionally, proposed U.S. tariffs on Canadian imports could impact construction costs, potentially affecting builder confidence and future housing developments.

Market Outlook

As 2025 progresses, the real estate market is full of opportunity and momentum. Canada’s six major banks are optimistic about growth this year, driven by lower borrowing costs and rising market activity. This presents an exciting landscape for buyers, sellers, and investors. With growing confidence and fresh opportunities on the horizon, those who act strategically now can set themselves up for success in this dynamic market. Stay tuned to our blog for regular updates and informative facts.