The Canada Mortgage and Housing Corporation (CMHC) has released its 2025 Housing Market Outlook. It offers insights into the key factors shaping Canada’s real estate sector over the next three years. While economic uncertainty remains, due to trade tensions and immigration policy changes, the report forecasts a recovery in housing activity. Lower interest rates encourage buyers back into the market. 
Trade Tensions and Immigration Policy Changes.
One of the biggest risks outlined in the CMHC’s report, is Canada’s trade relationship with the US. If proposed tariffs, of up to 25% on Canadian exports, are implemented, economic growth could weaken, leading to job losses and a potential recession. In response, Canada may introduce its own tariffs, further straining economic conditions.
Additionally, Canada’s decision to reduce immigration targets between 2025 and 2027, will slow population growth, impacting housing demand. However, CMHC expects economic conditions to stabilize in 2026 and 2027, with the Bank of Canada likely cutting interest rates to support recovery. This will particularly be beneficial for variable-rate mortgages, making homeownership more accessible.
Homebuyers Poised for a Comeback
CMHC predicts housing activity will improve in 2025, as mortgage rates decline and mortgage qualification rules ease. Buyers who were previously priced out of the market are expected to return, though affordability will remain a challenge due to rising home prices.
The resale market is likely to see the most activity, as it provides more affordable options compare to newly built homes, which continue to face high construction costs and tighter financing conditions. Repeat buyers, including those renewing their mortgages from the pandemic era, are also expected to drive market activity.
Slower Housing Starts and Investor Caution.
Despite increased demand, new home construction is expected to slow over the next three years. High borrowing costs and reduced investor interest in pre-construction condominium projects will contribute to fewer housing starts.
CMHC acknowledges that the housing outlook remains uncertain, with trade tensions, interest rates, and policy decisions playing a crucial role in shaping the market’s future. However, with lower borrowing costs on the horizon, buyers could see improved opportunities in 2025.
If you are in the process of selling or buying a property don’t delay, contact us to see what your mortgage options are.
Original article: www.mpamag.com
