CREA lowers 2025 housing market forecast

The Canadian Real Estate Association (CREA) has revised its 2025 housing forecast downward, projecting a 3% decline in home sales despite two consecutive months of growth, including a 2.8% month-over-month increase in June.

Sales rise but annual outlook dims

June marked the second straight month of sales increases across Canada, with the Greater Toronto Area leading the recovery with a 17.4% cumulative gain since April. However, CREA now expects approximately 469,503 residential properties to change hands through Canadian MLS Systems in 2025, representing a 3% drop from 2024 levels.

“At the overall national level, June was kind of a carbon copy of May in a lot of ways,” said CREA senior economist Shaun Cathcart. “Which is good, because it means sales were up again and prices held steady again, as opposed to falling.”

The revised forecast reflects ongoing economic uncertainty, including recent tariff policies announced by US president Donald Trump, which have pushed some buyers back to the sidelines.

Price corrections continue

National average home prices are forecast to decline 1.7% annually to $677,368 in 2025, approximately $10,000 lower than CREA’s April projection. Only British Columbia and Ontario are expected to see price declines this year, but their large market presence affects the national average despite price gains in other provinces.

New listings fell 2.9% month-over-month in June, though inventory remains 11.4% higher than last year. The actual national average sale price dropped 1.3% year-over-year.

Market conditions favour buyers

Current conditions may benefit prospective homeowners with job security. Interest rates have fallen from 5% in April 2024 to 2.75% today, with the Bank of Canada’s next rate announcement scheduled for July 30.

“Most housing markets continued to turn a corner in June, although market conditions still vary considerably depending on where you are in Canada,” said Valérie Paquin, chair of CREA’s Board of Directors.

Looking ahead

CREA projects a 6.3% sales rebound to 499,081 transactions in 2026, though this would mark the fourth consecutive year below 500,000 sales – a threshold reached only seven times since 2007.

The national average home price is expected to increase 3% to $697,929 in 2026, maintaining the sixth straight year in the $700,000 range.

All forecasts remain subject to high uncertainty levels as economic conditions continue evolving.

CMP

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