The outlook for interest rate cuts has shifted significantly since the Canadian Real Estate Association (CREA) released its summer forecast for home sales and average prices through Multiple Listing Service® (MLS®) Systems of Canadian real estate boards and associations for 2024 and 2025.
Now, markets anticipate the Bank of Canada will return to a “neutral” rate by next spring or summer, rather than the gradual, multi-year timeline that was expected in July.
“CREA’s previous forecast assumed a gradual return of buyers into the market starting with the first interest rate cuts this summer, but the market has seen little movement. It’s possible the type of buyer who was, until recently, entering the market with a three-year fixed rate mortgage has decided to hold off for better rates that now seem just around the corner” CREA Stats Team, Équipe des statistiques de l’ACI (2024).
As a result, the outlook for sales has shifted from gradual improvement to a more stagnant market expected to persist until next spring, when a sharper rebound is anticipated. This has led to a slight downward adjustment in sales projections for this year and next, but with the potential for much stronger growth starting in the second quarter of 2025.
Some 468,900 residential properties are forecast to trade hands via Canadian MLS® Systems in 2024, a 5.2% increase from 2023.
National home sales are forecast to climb a further 6.6% to 499,800 units in 2025 as interest rates continue to decline and demand flows back off the sidelines.
CREA Stats Team, Équipe des statistiques de l’ACI (2024). CREA Forecasts National Home Sales to Climb 6.6% in 2025. Canadian Real Estate Association. Retrieved from https://www.creacafe.ca/crea-forecasts-national-home-sales-to-climb-6-6-in-2025/