Housing Prices Expected to Rise 5% Across Canada in 2025: RE/Max Report

A home for sale in Vancouver on June, 28, 2016. THE CANADIAN PRESS/Jonathan Hayward

Canadian housing prices are expected to rise by 5 percent next year, with sales increasing by 25 percent, according to a 2025 housing market forecast.

The report, 2025 Housing Market Outlook Report released on Nov. 26 by Re/Max, said 44 percent of housing market regions in Canada are expected to become sellers’ markets in 2025. Thirty-three percent will balance out, and 17 percent will favour buyers.

As part of the report, Re/Max commissioned a Leger survey and found that Canadians still see homeownership as a valuable investment (73 percent). It also found that 60 percent of respondents own their own homes and 28 percent rent. Eight percent of those surveyed neither rent nor own.

About 4 in 10 Canadians say home ownership is out of reach for them, and 20 percent believe they cannot afford to own a home.

“The current environment is more encouraging than it has been in the past few years, especially for first-time homebuyers,” Re/Max president Christopher Alexander said in a Nov. 26 news release. “However, a boost in sales, coupled with limited inventory, almost always leads to rising prices, which is the trend we’re expecting to see materialize in virtually all Canadian housing markets.”

The report contained a forecast for housing market changes from region to region, with Ontario housing prices rising because of low supply and lack of affordable housing, report authors said. The exception is Toronto, which will remain flat with an expected 0.1 percent price increase.

In other parts of the province, prices are projected to rise by rates ranging from 2 percent in Niagara to 10 percent in Simcoe County. Hamilton housing prices are forecast to rise 2.3 percent, while Ottawa is looking at 2.5 percent. Sault Ste. Marie, Thunder Bay, and Muskoka property prices will increase 3 percent next year, the report said, while London’s housing market is expected to see a 4.5 percent increase in prices, as is Burlington. In Sudbury, North Bay, and York, that number is 5 percent. Kitchener-Waterloo, Mississauga, and Brampton will see a 6 percent jump in housing prices.

Most markets are expected to be balanced, that is, not favouring either buyers or sellers. However, for those in Sudbury, North Bay, Simcoe County, York, and Thunder Bay, a seller’s market is expected for 2025. A buyer’s market is expected in Burlington, Hamilton, and Muskoka.

First-time homebuyers are expected to drive the market activity for 2025, with the exception of areas like Toronto, Windsor, York, and Simcoe Country, where due to higher home prices activity is expected to be driven by move-up buyers.

Western Canada will see housing price increases ranging between 3 and 10 percent.

In the Vancouver area housing prices are expected to jump 7 percent in 2025, while cities outside the Lower Mainland will see smaller growth, such as a 3 percent rise in Kelowna and 4 percent on Vancouver Island. Sales outside the Lower Mainland are expected to increase anywhere from 4 to 20 percent.

In Alberta, Re/Max predicts a 10 percent increase in housing prices in Edmonton and 5 percent in Calgary. Sales in both cities are expected to increase between 2 and 5 percent.

In Winnipeg, prices are anticipated to go up 5 percent, with sales increasing between 2 and 5 percent.

On the East Coast, housing prices are expected to rise by 1.5 percent in Charlottetown, 3.5 percent in Saint John, 5.5 percent in Fredericton, 5 percent in Halifax, and 8 percent in Truro and Colchester County in Nova Scotia as well as St. John’s, Newfoundland.

Sales are expected to rise by 1.5 percent in Charlottetown, 5 percent in St. John’s, and 6 percent in Halifax, while numbers should remain flat in Saint John and Fredericton.