Once again it’s time to dust off the old crystal ball and see what’s going to happen in real estate for 2025!
I’m a little less certain with the accuracy of this crystal ball since last year’s predictions were a little off. As you may recall, it predicted that 2024 would have slight increases in prices and demand as the Bank of Canada reduced interest rates throughout the second half of the year. We all thought that these interest rate cuts would help buyers get back into the market and stimulate real estate sales. However, even with interest rates being reduced instead of an incline in demand we actually saw a decline, causing prices to soften. I haven’t quite given up on this crystal ball though, so I will brush off the dust and warm it up.
As I brush off the dust and give the ball a rub with my hands to warm it up, my curiosity starts to build and I’m excited again to be in front of this crystal ball. There’s so much uncertainty in the current real estate environment and I’m hoping this holds the answers to all my questions. The ball starts to come to life with a colorful glow, showing me that it’s ready for my first question. My first question is a bit loaded as I already know the answer, but I wanted to see what the ball will say; what will interest rates do this year and how low will they get? It immediately tells me that the Bank of Canada interest rate will continue to go down to 2.5% by June, just as I suspected. I’m starting to feel more confident in these answers. So for my next question I put some thought into what it should be. Since the news is talking about tariffs, I decided to ask how tariffs will affect the real estate market. It took a few seconds to reply, but eventually told me that they will increase the cost of goods, causing our Canadian dollar to fall to 20 year lows and affect the economy in general. In regards to housing, as the Canadian dollar drops lower the cost of goods for housing materials will increase, making it more expensive to build. With less new housing coming up on the market we will see the demand for existing housing grow, causing prices to increase. Perfect entryway into my next question, when will we see prices increase? The ball lets me know that we may see slight increases towards the end of this year, but overall the market will be fairly flat. It’s saying that 2026 will see further price increases, this time at a higher level as the demand will be much higher than supply. So when will we see the market shift from a buyers market to a sellers market I wonder? The ball took some time and let me know we will start seeing a pick up in demand in the late spring. Prices will not see a large increase, and we will not see an increase until the beginning of next year. The ball is showing me a lot of uncertainty and with uncertainty people hold back from making decisions. There’s a lot of people out there that want to move as they have been holding off the past couple years, and there is a strong pent-up demand. It’s seeing a change in government which will bring less red tape for building, becoming more streamlined and affordable for builders to build here.
I asked the ball for some positive news to look forward to this year. The good news is that starting out this year buyers will have more choices and the lower interest rates will make housing more attainable for more people. In the later half of the year when the demand grows and supply lessens then we will see prices increase, which is good news if you’re thinking of selling. The other good news is that interest rates will drop and remain low for quite some time, giving people that are coming up for renewal some relief.
The crystal ball begins to dim, it’s done answering questions for another year. As I think about everything I just learned, I realize it doesn’t actually matter. No matter what is going on with interest rates, the economy, or whatever else, there’s always people that need a roof over their head. The demand for prime real estate is always going to be there. We may see a slight drop in prices, but then there will be a drop in inventory, and with a drop in inventory we see a pick up in demand resulting in an increase in prices. The bigger the drop the higher the demand we see later. As we all know, real estate is a long term investment and will remain a great investment.
May 14, 2026 
