Akshay Kalbag
As potential homebuyers await a further drop in mortgage rates, Canadian Housing Outlook,
a report recently released by TD Economics, has forecast a deluge of activity in Canada’s real
estate market for the first half of 2025. The fall in interest rates and federal reforms to
mortgage rules were the factors identified for the surge in demand.
It added that much of the growing demand was attributable to pent-up demand for the past
two years, as many buyers grapple with higher mortgage costs.
The report suggested that despite the decline in mortgage rates in the past few months, many
prospective buyers continued to be on the sidelines. It added that many were waiting for the
Bank of Canada to further reduce the overnight rate of interest. That was likely to result in a
further reduction in the cost of mortgages.
At the same time, the federal government has made a recent change. It will permit 30-year
amortization mortgages for first-time buyers on new and resale homes. That will come into
effect in December. Consequently, most buyers are likely to defer making a purchase this fall.
Both factors pointed to a rebound in activity early in 2025. The report further predicted that
home resales in Canada would increase by almost eight percent in the first quarter of next
year vis-à-vis the last one of 2024.
Moreover, the second quarter of 2025 could witness another four-plus percent growth vis-à-
vis the first quarter.
At the same time, prices were forecast to grow nearly three percent quarter-over-quarter in
the first three months of next year and an additional two percent in the second quarter. For
the remainder of the year, TD Economics estimated that prices and sales would be slightly
higher or flat, quarter over quarter.
Alberta was estimated to be among the provincial leaders for price and sales growth next
year. TD Economics predicted that sales would rise 8.5 percent year-over-year and prices
would gain seven percent. As far as the provinces were concerned, that was the highest
forecast price increase.
The report added that Ontario and British Columbia could lead sales growth at
approximately 23 percent apiece.