CREA Predicts National Home Sales Will Climb 6.6 per cent in 2025
The expected pace of interest rate cuts has drastically changed since the Canadian Real Estate Association (CREA) published its summer forecast for home sales activity and average home prices via Multiple Listing Service Systems of Canadian real estate boards and associations for 2024 and 2025.
According to CREA, markets now expect the Bank of Canada to get back to a “neutral” rate by spring or summer of 2025, as opposed to the multi-year path anticipated back in July.
A previous forecast by CREA assumed a gradual return of buyers into the market beginning with the first interest rate cuts this summer. However, the market has not seen much movement. CREA noted that it’s possible the type of buyer who was entering the market with a three-year fixed rate mortgage has decided to hold off for better rates.
The profile for sales from one of a gradual improvement has changed to one where the market is predicted to remain in more of a holding pattern until next spring, when a sharper rebound is expected. The result is a slight downward revision to sales this year and next, but with the potential for much stronger momentum beginning in the second quarter of 2025.
Some 468,900 residential properties are predicted to trade hands via Canadian MLS Systems in 2024, a 5.2 per cent increase from 2023.
The national average home price is predicted to edge up 0.9 per cent on an annual basis to $683,200 in 2024 and by 4.4 per cent to $713,375 in 2025.
National home sales are forecast to increase a further 6.6 per cent to 499,800 units in 2025 as interest rates continue to decline and demand flows back off the sidelines.
Each quarter, CREA updates its forecast for home sales activity and average home prices via Multiple Listing Service Systems of Canadian real estate boards and associations.