After a few years of atypical trends, Canada’s real estate market is set to experience a traditional spring surge in 2025, according to a new study by real estate brokerage Zoocasa. With stabilized interest rates and strong pent-up demand, the market is anticipated to see increased buyer activity starting as early as March.
“Next year, Canadians can anticipate a lively spring market,” said Lauren Haw, Zoocasa broker of record and industry relations officer. “With interest rates stabilizing, we’re likely to see a return to a more traditional spring surge in real estate activity.”
Four recent interest rate cuts by the Bank of Canada, bringing the overnight lending rate to 3.75%, are expected to spur buyer interest. Since the peak in 2021, spring home sales have declined, but 2025 could see a turnaround as sidelined buyers re-enter the market.
A Re/Max report predicts the national average home price will rise by 5% in 2025, with some regions experiencing even larger increases. Ontario’s housing market, in particular, is expected to attract first-time buyers as average home and condo prices remained mostly flat in 2024, with condos seeing year-over-year declines.
The Canadian Real Estate Association reported that while May 2024 saw the lowest national home sales for the month since 2021, new listings were near 2021 and 2022 highs, offering buyers more choices. This dynamic could shift in 2025, with increased buyer activity creating competition and encouraging more sellers to list their properties.
Haw noted that mortgage renewals could also influence the market. “A wave of mortgage renewals is likely to push some homeowners to downsize, adding to supply,” she said. “Although rates have come down, they remain significantly above the low levels of 2020 and 2021, when many mortgages were originally secured.”
A recent Zoocasa survey revealed that 42.3% of respondents cited rising home prices as their primary concern in home buying, followed by interest rates (25.6%) and economic uncertainty (14.9%).
With the prospect of rising prices on the horizon, first-time buyers may be motivated to act. “This may be their window of opportunity to enter the market before prices rise further,” Haw said.
As spring approaches, the anticipated surge in buyer demand and increased supply from sellers could rejuvenate the market, bringing new opportunities for buyers and sellers alike.