Canadian Housing Market Surges Into 2025 Optimism Amid Regional Variations and Risks
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The Canadian housing market is closing 2024 on a high note, with unexpected growth in home sales during the fourth quarter. According to TD Economist Rishi Sondhi, sales have surged approximately 12% quarter-over-quarter, surpassing pre-pandemic levels earlier than projected. This strong performance has shifted forecasts toward a more optimistic outlook for 2025.
Several factors are driving this growth, including falling borrowing costs, steady economic expansion, and new mortgage regulations introduced in December. Regional trends vary significantly: British Columbia and Ontario are leading in sales growth but face affordability challenges, while Alberta and the Prairies remain stable due to better affordability. Quebec is poised for solid price gains, while Atlantic Canada may see slower growth as interprovincial migration wanes.
Despite the optimism, risks remain. Potential economic damage from tariff threats and affordability concerns could temper growth. However, further declines in borrowing costs could amplify sales and prices, offering an upside to the current forecast.
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