By most projections, the Canadian housing market is expected to see modest sales and price gains in 2025, but “it’s still a long way back to the 2022 highs,” according to BMO Senior Economist, Robert Kavcic. 

In BMO’s housing outlook for 2025, Kavcic predicts national home prices won’t push past 2022 levels until 2029 under the bank’s base-case scenario.

Modest growth in sales and prices

According to the report, sales volumes are expected to rise 12 per cent this year, driven by a rebound from the “depressed” levels of the previous year, while the benchmark home price is forecasted to climb a modest 4 per cent “as still-challenging affordability and investment calculus will keep the rebound in check.”

Regionally, Southern Ontario and British Columbia—markets that saw some of the sharpest declines—are expected to recover, while Alberta and Atlantic Canada, which outperformed during the pandemic, are likely to see more tempered growth. 

BMO highlights a sharp contrast in performance within major cities like Toronto, where single-detached homes are in demand but, as we’ve heard repeatedly, the condo market faces mounting pressure due to an influx of new units hitting the market. “Look for condo prices to struggle in 2025 even if the single-detached market improves further,” the report states.

Mortgage rates near cycle lows

Mortgage rates are another critical factor shaping the housing market in 2025. BMO notes that most of the Bank of Canada’s current rate-cut cycle has already been priced into fixed mortgage rates, which are now in the low-to-mid 4 per cent range. Kavcic adds, “There is room for variable rates—currently around 4.7 per cent—to test the 4 per cent level, which would be an important psychological and valuation barrier, but the Bank will have to continue easing.”

New mortgage rules implemented in December “should incrementally ease conditions into the spring season.” These include an increase in the price cap for insured mortgages, from $1-million to $1.5-million, and the extension of 30-year amortizations to first-time buyers and purchasers of new homes. Kavcic expects these changes could make housing more accessible, particularly in larger markets where lower-end single-family homes and larger condos often fall within the updated price range.

Challenges in affordability and investment

Despite these positive trends, affordability remains a significant challenge. Kavcic is calling for sub-4 per cent borrowing costs: “If we plug 3.9 per cent mortgage rates and a 30-year amortization into our affordability calculator, we get back into the realm of what was sustained pre-pandemic, assuming prices remain at current levels.”

The economist says this scenario could allow room for prices to rise modestly without (again) running into affordability constraints. 

A cooling rental market

There are notable shifts happening in the rental sector. A combination of reduced immigration targets and an influx of new rental supply is driving down rents in major markets. The report cites data from Rentals.ca, showing a “near double-digit decline in 1-bedroom Toronto apartments.” This trend is expected to continue through 2025, with higher vacancy rates and falling rents bringing relief to renters.

Long-term outlook

Looking ahead, BMO underscores that the Canadian housing market is in the middle of a “prolonged period of consolidation.” Kavcic compares the current trajectory to past corrections, including the deep housing downturn of the 1990s. While today’s economic conditions differ significantly, the demographic and financial pressures on the market are reminiscent of that era.

“Suffice it to say, this was an extraordinarily bullish trio that won’t be repeated,” referring to the convergence of low interest rates, peak millennial demand and record immigration that fueled the 2022 highs. With these forces now dissipating, the road ahead is one of gradual recovery rather than “exuberant” growth.

CREA released their December statistics along with their hallmark annual optimism heading into January. The big question on everyone’s mind is whether or not that optimism is warranted moving into 2025’s real estate market. 

CREA also seems to feel that we can see a resurrection of volume (the number of homes sold in 2025) without prices rising to the point of unaffordability. 

I think they might be right. At this point, people are buying homes again because they can afford to. As long as that doesn’t change, 2025 should be a good year for Realtors, even if it’s not a good year for the homeowners hoping their house prices go up. 

We should certainly hope to see some life in the resale market, given that new condo sales in 2024 were the lowest they’ve been since 1996, according to a recent report from Urbanation.

Source: Urbanation

Should this housing correction continue along its path, it looks like we’re in about the third or fourth inning here, and it’ll be a while until we see house prices trend upwards again in a meaningful way. BMO recently visualized this in the excellent chart below.

As we close the books on 2024, it’s worth reflecting on the Canadian housing market’s performance, particularly during its quieter December period. After a remarkable fall rebound, the market saw sales activity dip 5.8 per cent in December compared to November. 

At first glance, this might seem like a retreat, but dig deeper, and the picture tells a different story—a market poised for a potentially significant shift this coming spring.

Much like a second-period intermission, December’s slowdown feels more like a pause than an end. Despite the dip, sales were still 13 per cent above where they stood in May 2024, just before the Bank of Canada made its first interest rate cut in June. 

In fact, the fourth quarter was among the strongest in the past 20 years (excluding the pandemic), showing the resilience of the Canadian housing market even amid affordability challenges and economic uncertainty.

A supply story, not a demand story

The narrative driving December’s cooling wasn’t a lack of buyers—it was a scarcity of homes for sale. Nationally, new listings fell 1.7 per cent month-over-month, marking the third consecutive decline after a September surge. 

The result? A market where potential buyers found themselves facing limited options, even as affordability began to improve. Faced with this challenge, many buyers may have pushed their purchase to Spring 2025, which fuelled CREA’s belief in a “pent-up demand” scenario in the year’s first quarter. 

The bigger question on my mind is whether or not we could see a “pent-up supply” scenario as well, given the market is facing a few key factors:

• The impact of a trade war (Bank of Canada is predicting as much as a -6 per cent impact)
• Rising unemployment (albeit surprisingly strong in December)
• A change in government that promises less government jobs and spending
• Increasing purpose-built rental supply competing with investors
• Historically high jump in supply from completions in 2024 and 2025
• A record number of mortgages renewing at higher interest rates 
• To me, the pent-up supply argument could be stronger than the one for pent-up demand.
  
  

Absorption is normal, not “strong” 

The national sales-to-new listings ratio, a key indicator of market balance, eased back to 56.9 per cent in December from a 17-month high of 59.3 per cent in November. For context, this figure hovers near the long-term average of 55 per cent, reinforcing the idea that we’re still in a relatively balanced market. Yet, with inventory levels well below historical norms—128,000 properties listed nationally, compared to a long-term average of 150,000—buyers remain at a slight disadvantage.

Affordability: A fragile silver lining

One of the more optimistic takeaways from CREA’s December data is the indication of modest improvements in housing affordability. Mortgage payments as a percentage of income (MPPI) have begun to decline, supported in part by the Bank of Canada’s interest rate cuts earlier in the year. This relief has allowed more buyers to consider entering the market, particularly in regions where prices have stabilized.

However, this silver lining comes with caveats. The national average sale price rose 2.5 per cent year-over-year to $676,640, and the MLS HPI edged up 0.3 per cent month-over-month. While these price increases are smaller than those seen in previous years, they could still erode the modest affordability gains if household incomes do not keep pace. In short, any improvement in affordability remains precarious.

Adding to the uncertainty are broader economic pressures. Rising unemployment and potential government hiring cuts loom as risks that could dampen affordability this year. These factors may offset the positive effects of declining mortgage payment costs, particularly if interest rate cuts slow or stall.

The forecast remains uncertain: will sustained rate reductions and stable home prices bolster affordability, or will economic pressures push it further out of reach for many Canadians? For now, the improvements in affordability offer a glimmer of hope, but the coming months will reveal whether that hope is sustainable or fleeting.

The role of inventory in 2024’s narrative

A closer look at inventory trends highlights why 2024’s market defied expectations in certain months while tapering off in December. After peaking in September, new listings steadily declined over the fall, creating a bottleneck that frustrated buyers eager to capitalize on improved affordability. By December, there were just 3.9 months of inventory on the market—a slight increase from November’s 3.6 months but still well below the long-term average of five months.

This constrained inventory helped keep prices relatively stable, even as sales activity slowed. Sellers, wary of accepting lower offers, chose to hold firm or delay listing altogether, contributing to a stalemate in the market. This dynamic was particularly evident in urban centers like Metro Vancouver, where the market displayed modest stability with a 0.7 per cent month-over-month price increase and steady demand. The limited flexibility in prices on both sides reflects the cautious behaviour of buyers and sellers alike, highlighting the ongoing challenges of navigating a market shaped by tight inventory.

Spring 2025: The perfect storm for a demand surge?

Looking ahead, spring 2025 could mark a turning point. As snow melts and sellers bring new properties to market, demand is expected to unleash in a big way. Historical patterns suggest that real estate springs to life earlier than anticipated, and this year should be no different. 

CREA anticipates a notable uptick in activity for 2025, with an estimated 532,704 residential properties expected to change hands through Canadian MLS—a substantial 8.6 per cent jump over 2024. Shaun Cathcart, CREA’s senior economist, predicts that the anticipated bottoming out of interest rates will encourage more sellers to list their homes, further fueling the surge in activity.

The market conditions brewing this spring could create opportunities not seen in years, particularly if affordability continues to improve.

How interest rates shape the 2025 outlook

Interest rates remain the wild card. The Bank of Canada’s decision to cut rates in June 2024 provided a much-needed boost to affordability, but further reductions will be critical to sustaining momentum. Lower interest rates could not only draw more buyers into the market but also encourage sellers to list properties that were previously held back due to unfavourable market conditions.

However, the timing and scale of rate adjustments will play a pivotal role. A delay in cuts could dampen the anticipated spring surge, while aggressive reductions could reignite fears of another housing bubble. Policymakers will need to strike a delicate balance to support market stability without overcorrecting.

The long road to balanced housing

Despite the promise of greener pastures, structural challenges in the Canadian housing market remain unresolved. Inventory levels are still below historical averages, and the gap between buyer expectations and seller realities shows no signs of closing quickly. 

Adding to these challenges, recent announcements regarding reductions in immigration targets could have a significant impact on housing demand. Canada has relied heavily on immigration to drive population growth, which in turn fuels housing market activity. With immigration levels curtailed, the anticipated surge in demand may soften, potentially easing pressure on housing supply but also creating uncertainty for developers and long-term market stability. Lower immigration could temper price growth in some regions, but it also risks stalling construction projects and reducing economic momentum tied to new arrivals.

The chart below highlights the municipalities with the highest population changes in 2024 compared to 2023, a trend heavily influenced by the surge in international students. This demographic has significantly contributed to local rental and housing demand. Such growth may not be as pronounced in the coming years.

Source: valery.ca 

What December tells us

While December 2024 wasn’t the blockbuster end to the year some might have hoped for, it offers valuable insights into the market’s current state and future trajectory. Inventory levels remain tight but are improving, prices are stabilizing, and the balance between buyers and sellers is holding steady.

The question lingers: will the spring market deliver the long-awaited relief buyers crave, or will it usher in another cycle of rising prices? One thing is clear—2024 stands as a transitional year—neither a full recovery nor a complete correction. It offered glimpses of stability but left plenty of unanswered questions for 2025. 

The calm before the storm? Perhaps. But in Canadian real estate, the only constant is change.

What kind of real estate team are you running? Is it one based on ego, or on success?

These are important questions, as we find ourselves on the precipice of what could be the next real estate boom. Lower interest rates are attracting sellers and buyers into the market once more, prices will rise and a flood of new agents (with the best intentions) will follow.

As those agents come knocking on your door, you should be asking yourself: is more really more?

The promise and pitfalls of mega teams

The “mega team” model has been gaining more attention recently, and of course, it can work, but only under the right leadership. Real estate is a naturally competitive business, and I’m flabbergasted that in today’s transparent world, where everyone can see what their colleagues and counterparts are producing, the size of so many of these “mega teams” still outweigh their production.

New agents: The advantages of joining the right team

As a new agent just starting out, joining a team can be career changing. Most of your expenses are covered by your split, your marketing is done for you, and you have direct access to hands-on mentorship. The right team can help new agents gain traction and set them up for success, until they’re off and running all on their own. 

Team leaders: Balancing quality and quantity 

As a team leader, working with top-performing agents can be incredibly rewarding. Imagine the potential of leading a mega team of a hundred high producers – that’s more power, and significantly more income, in your hands.

However, investing in a team with too many low- or non-producers who occupy your office, consume your resources, and demand your attention as a leader is unlikely to yield any meaningful returns. Even if you charge high office fees, retaining these underperformers ultimately distracts from the productivity of your high-achieving team members and undermines their efforts.

Strong leadership is the key to navigating market cycles

The success and sustainability of a mega team, or any team model for that matter, comes down to two critical factors: strong leadership that is hyper-focused on agents’ success, and agents who sell a lot of real estate. To our home-buying and selling clients, we always tout the benefits of “local” market expertise. This is also the case when it comes to team leaders.

Since booms are sometimes followed by busts, solid leadership makes all the difference. Shooting fish in a barrel doesn’t require much skill and it doesn’t demand leadership, only opportunity. This can be said of an “up” housing market. But what goes up eventually comes back down, and when it does, experienced leadership and a brand invested in its network’s success will help individual agents and brokers weather those up, down and sometimes sideways markets.

The bottom line 

If you’re a team leader, don’t get caught up in the quantity of your agents over their quality, and remember that the bigger team doesn’t always win.

If you’re a team member, ask yourself if your environment and the people in it are lifting you up and encouraging you to be your best self, or if they’re dragging you down. Be wary of the mega team that doesn’t have the production to back up its numbers.

Leaders are responsible for developing strong, professional agents and ensuring they can weather any storm. Whether it’s the fluctuating economy or a chronic housing shortage, there’s no question that running a successful real estate business demands a whole lot of strategy. Given these macro and micro complexities, make sure your agents are professional and ready to work for the team – regardless of its size.

The influx of 471,771 new permanent residents in 2023—and a targeted 485,000 for 2024—was a transformative force in driving luxury real estate demand across Canada’s major cities, according to the Sotheby’s International Realty Canada Top-Tier Real Estate: 2024 State of Luxury Annual Report. The Bank of Canada’s monetary easing, which began in June, further fueled market momentum.

Although affluent buyers are less affected by mortgage rates, successive interest rate cuts enhanced consumer confidence and facilitated movement from conventional markets into entry-level luxury segments.

By October 2024, home sales activity across Canada’s MLS systems climbed 7.7 per cent month-over-month—the highest since April 2022—followed by another 2.8 per cent increase in November. The Bank of Canada’s December rate cut of 50 basis points to 3.25 per cent is expected to further energize the market in 2025.

“Canada’s conventional and luxury real estate market demonstrated remarkable resilience in 2024 and closed the final quarter of the year with a pick-up in sales activity that foreshadows further improvement in the months ahead,” said Don Kottick, president and CEO of Sotheby’s International Realty Canada, in a press release.

Greater Toronto Area (GTA)

The GTA led Canada’s luxury market resurgence, with sales over $4 million rising 21 per cent year-over-year in 2024. Single-family homes dominated, making up 91 per cent of luxury sales in this segment. Ultra-luxury sales over $10 million increased 20 per cent, supported by a mix of MLS and private transactions.  

Calgary

Calgary experienced the fastest growth in luxury sales among Canada’s major cities. Sales over $1 million surged 42 per cent, while those over $4 million doubled year-over-year. Single-family and attached homes saw the steepest increases, reflecting a population-driven demand boom.  

Montreal

Luxury sales in Montreal showed notable resilience, with $4 million-plus sales up 16 per cent and $1 million-plus transactions rising 38 per cent. The city reported strong growth across all housing types, with condominiums seeing a 53 per cent increase.  

Vancouver

Vancouver’s luxury market lagged in 2024 due to misaligned seller expectations and a softer local economy. Sales over $4 million declined 11 per cent, while ultra-luxury transactions over $10 million fell 29 per cent. However, $4 million-plus condominium sales rose 26 per cent, reflecting an emerging opportunity in this segment.  

The bottom line

Kottick highlighted Toronto and Montreal’s revitalization as a model for national market improvement, driven by realistic pricing and falling interest rates. He also noted that Calgary continues to lead expansion in top-tier housing sales, putting unprecedented pressure on housing supply and prices.

Kottick contrasted this with a weaker picture of Vancouver’s economy, and “the ongoing standoff between sellers clinging to peak-era valuations and buyers demanding prices that reflect today’s reality” that’s slowing Vancouver’s market.

He also emphasized the long-term investment potential of luxury condominiums in Toronto and Vancouver, where declining prices and low competition create favourable conditions for buyers. As population growth intensifies housing demand, these markets are poised for future gains.  

Ottawa saw 613 homes sell in December 2024, 7.9 per cent more than the previous year, the Ottawa Real Estate Board (OREB) reports. This was 6.8 per cent below the five-year average and 2.7 per cent below the 10-year average for December.

Year-to-date, sales totalled 13,526 units in December, which was 11.8 per cent more than the same period in 2023.

“A year of wait-and-see came to a close with the expected slowdown over the holiday season,” said OREB president Paul Czan in a press release.

“The latter half of the year brought signs of more favourable market conditions with consecutive interest rate drops, higher insured mortgage limits and extended amortizations. It’s early to assess the impact of these measures. And it’s an uphill battle against affordability and supply issues that persist.”

Optimism tempered with political change uncertainty

Czan explained that listing activity shows sellers expect improved conditions to bring more activity from buyers who have been watching the market but hesitate to make moves.

”While the improving market conditions are encouraging, the supply needs to be there. Coming political shifts are adding a layer of uncertainty but there is a trending optimism for more increased market activity in the months ahead.”

Source: OREB

Prices

The overall home price index composite benchmark price was $645,800 in December 2024, an increase of 3.8 per cent from December 2023.

This measure for a single-family home was $729,300, up 3.7 per cent year-over-year. Townhouse/row homes came in at $533,200, up 11.3 per cent from the year prior. Apartment homes were $404,400, 2.5 per cent less than in 2023.

Home sales in December 2024 totalled $406.9 million, up 12.7 per cent from December 2023. 

Inventory and new listings

December’s new listings rose by 13.6 per cent from the year before. The 603 new listings marked a 3.5 per cent increase from the five-year average and a 2.7 per cent drop from the 10-year average for December.

Active listings totalled 3,216 units at the end of December, 58.7 higher than December 2023, 90 per cent above the five-year average and 51.4 per cent above the 10-year average for the month.

Review the full report.

The global public real estate (REITs) market is brimming with opportunity, according to Hazelview Investments’ 2025 Global Public Real Estate Outlook Report. Offering a detailed roadmap for investors, the report emphasizes robust fundamentals and compelling valuations in global REITs, even amid a challenging economic environment. 

“The global REIT market has reached a pivotal moment, demonstrating resilience and potential for substantial gains,” said Corrado Russo, chief investment officer & head of global securities at Hazelview Investments, in a press release.

The company’s portfolio managers are optimistic about 2025. “With strategic active management and a keen focus on sectors poised for growth, 2025 presents an expansive landscape for investors,” Russo added.

2024 recap

Global REITs rebounded in the latter half of 2024 as central banks initiated interest rate cuts and investor confidence grew. Although a cautious stance from the United States Federal Reserve in December trimmed some gains, REITs closed the year with mid-single-digit positive returns.  

Top performers included the U.S. and Australia, with healthcare and data centre sectors outpacing others due to robust demand and limited supply.  

Strong fundamentals continue

High occupancy rates and supply constraints are benefitting core property types, trends expected to persist into 2025.

As well, years of strategic debt reduction have positioned REITs to capitalize on lower costs of capital for acquisitions and debt management.  

Valuation opportunities

Global REITs are trading at their most attractive valuations relative to global equities in decades.

Hazelview’s analysis reveals that they remain undervalued compared to their intrinsic value, providing an excellent entry point and return for investors.  

Key investment themes for 2025

1. Global data centre demand will grow thanks to AI and digital transformation.

2. Senior housing in North America will expand with aging demographics and limited supply.

3. Japan’s recovering tourism and declining new supply will set the stage for hotel growth.

4. Commercial real estate brokers will benefit from increased transaction volumes and outsourcing trends.

5. Residential real estate in Australia and Germany should see opportunities from rental growth and supply-demand imbalances.

As we reflect on 2024’s market, I can’t help but draw parallels to another pivotal moment in Toronto’s real estate history: the dramatic correction of the early 1990s. Back then, Toronto experienced what many considered unthinkable: a six-year decline that saw average home prices plummet by 28 per cent from their 1989 peak. The catalyst? A perfect storm of rising interest rates, recession and overbuilding that burst what was then considered Toronto’s first major housing bubble. 

That correction fundamentally reshaped the market. Properties that had been snapped up for $500,000 in 1989 were selling for $350,000 by 1996. Developers went bankrupt, leaving half-finished condominiums dotting the skyline. The term “negative equity” entered the everyday vocabulary of Toronto homeowners, as thousands found themselves underwater on their mortgages.

But if you look back on that period, the market appeared almost “flat” from about 1991 to 1996 after the steep drop. A similar trend can be observed in the chart above, which shows house prices since interest rate hikes started in 2022.

Where we’re at now

Today’s market might echo some aspects of that tumultuous period, with falling prices brought on by once-rising interest rates, perpetual affordability concerns, an election, changes to capital gains structure and more economic uncertainty, especially around unemployment.

So, it may come as a surprise to you that the market was warming up a bit in November (more sales, NOT higher prices). The reason we’re seeing more people buying houses in the Greater Toronto Area (GTA) is affordability.

Affordability is improving in Canadian real estate, and the GTA is at the forefront. In fact, housing affordability in Toronto has corrected more than any other major city in Canada according to the National Bank’s Q3 Housing Affordability Monitor.

A correction means that mortgage payment costs are decreasing as a percentage of household income. When people can afford to buy houses, they do. This phenomenon gave 2024 a relatively strong market in October and November, but December was slowed. 

The biggest support for the improvement in affordability could also be its greatest risk factor. RBC observed that growing household income significantly helped improve affordability in 2024’s third quarter. The challenge is the few key trends that could slow wage growth in 2025:

1. The unemployment rate is rising
2. The majority of job growth has come from government hiring
3. The likely winner of our election is committed to reducing the number of government employees

So, future improvements to housing affordability may come from a reduction in interest rates or house prices. In a healthy market, Toronto’s housing costs 40-50 per cent of median household income, and I expect it will get back there in time.

GTA 2024: A buyer’s market with caveats

For years, the GTA housing market felt like a relentless bidding ground, with escalating prices and scarce supply fueling a sense of urgency. However, 2024’s home sales reached 67,610—up 2.6 per cent from 65,877 in 2023—while new listings surged by 16.4 per cent to 166,121. On paper, this provided buyers with a clear advantage and more choice than they’d seen in years, hinting at a possible market correction.

Yet beneath the surface, the so-called “buyer’s market” has been far from a bargain. Despite the uptick in listings, the average selling price dipped by less than 1.0 per cent year-over-year, settling at $1,117,600 compared to $1,126,263 in 2023. Detached homes continued to command lofty prices, while condominiums —though subject to more notable price declines—still struggled to attract cost-conscious first-time buyers, many of whom stayed on the sidelines in hopes of greater interest rate relief down the road.

Monthly, there were some significant data points. Sales decreased by 1.8 per cent, while new listings and active listings substantially increased by 20.2 and 48.5 per cent, respectively. The average price saw a slight decrease of 1.6 per cent compared to December 2023, and days on market increased by 12-15 per cent.

The 16.4 per cent jump in new listings might suggest an easing of supply constraints, yet many sellers appeared hesitant to lower asking prices. Although the balanced supply-to-demand ratio theoretically favoured buyers, the minimal price drop signals seller resistance to resetting expectations. The gap between buyer hopes and market realities remained stubbornly wide.

Condominiums: A sector to watch in 2025

Of all the sectors in the GTA real estate market, the condominium sector is the one I’m really keeping my eye on. With more new condominium listings than ever before and record new supply added to the market in 2024, it shows no signs of letting up.

There are a few reasons for this. First, the Bank of Canada’s interest rate hikes made it more expensive for people to buy homes, causing some first-time buyers and investors to choose condominiums as a more affordable option. Second, the construction of new condominiums has been booming, which has added to supply on the market.

Despite the supply increase, condominium prices have not yet fallen as much as expected, probably not because demand remains strong but more because sellers have decided to lose money slowly rather than quickly. What I mean by this is the majority of new condominiums have been considered “cash flow negative” in the current market by Benjamin Tal and Urbanation. Based on my analysis, the majority are also “equity negative.” 

Source: Valery.ca Special Report

So, many sellers have set a floor price—that is, a minimum price they’d accept. If they don’t get that price, they decide to rent the unit out rather than sell it at a loss, allowing them to spread out the burden across monthly mortgage payments rather than absorbing it in one shot. 

Source: Robert Marsiglio, Realtor 

2025 predictions: Hope or more of the same?

Looking ahead, optimism for 2025 hinges on continued interest rate cuts and stable or marginally lower home prices. TRREB President Elechia Barry-Sproule expects improved market conditions over the next year, but the GTA market has a remarkable knack for bouncing back swiftly. Prospective buyers banking on continued softness may find themselves outpaced if the market rebounds.

Meanwhile, structural problems remain—congestion, supply constraints and stubbornly high prices. TRREB’s chief market analyst, Jason Mercer, emphasized that government policy reforms must address these core issues. Otherwise, the GTA’s real estate rollercoaster will continue with fleeting windows of affordability that close as quickly as they appear.

Far from a buyer’s utopia, 2024 felt more like an intermission. Yes, deals were occasionally on the table, but “affordable” remained a moving target—especially for those entering the market for the first time. The question persists: as we edge into 2025, will this pause evolve into genuine relief, or is it merely the calm before the next wave of price hikes? Only time—and possibly more interest rate adjustments—will tell.

The Greater Toronto Area’s (GTA) luxury housing market experienced a significant upswing in the final quarter of 2024 (Q4), with sales of properties over $3 million increasing by more than 40 per cent compared to the same period in 2023.

According to Re/Max Canada, over 360 freehold and condominium properties sold in Q4, a notable jump from 259 sales during the same timeframe last year.

“The impact of the first and second 50-basis-point rate cuts by the Bank of Canada radiated throughout the GTA in the fourth quarter, jumpstarting demand for high-end properties both within the city and suburbs,” says Re/Max Canada President Christopher Alexander.

“We’ve been expecting a surge in top-tier sales activity as the economic climate and corresponding pause in buying intentions prompted a build-up in pent-up demand. The fourth quarter did not disappoint.”

Record sales in GTA’s luxury real estate

Toronto proper accounted for 53 per cent of luxury sales, with suppressed property values creating opportunities in ultra-luxury price ranges between $5 million and $7.5 million. 

Properties over $5 million saw the most significant growth, with sales jumping nearly 59 per cent year-over-year. The $7.5 million and above category also posted gains, with sales increasing by 41 per cent, while properties over $10 million held steady compared to 2023.

Interestingly, nearly half of all $5 million-plus sales occurred in suburban areas, reflecting a growing preference for luxury homes outside the city core.

Catalysts driving growth

Several factors contributed to the resurgence of the luxury market:

• Lower interest rates. The Bank of Canada’s 100-basis-point reduction in 2024 fueled buyer enthusiasm.
• Stock market gains. Strong performances by the NASDAQ, and S&P 500 and TSX bolstered confidence among affluent investors.
• Easing inflation. Reduced economic pressures encouraged profit-taking, converting financial gains into property investments.

Luxury market outlook for 2025

While inventory challenges persist, rising buyer confidence and robust equity markets set the stage for sustained growth in Toronto’s luxury market. Affluent buyers are moving off the sidelines, and strong demand is anticipated to continue, particularly for single-detached homes.

Additionally, intergenerational wealth transfer and increased interest from international buyers, including affluent Chinese immigrants, are expected to support the high-end market.

Alexander says buyer optimism is growing, thanks to robust equity markets and lower interest rates, along with Canada Mortgage and Housing Corporation extending insurance coverage to $1.5 million for first-time buyers. “The ripple effect is expected to carry through to all price points, including the top end, as younger buyers return to the housing market.”

He also notes the political climate’s evolution from upcoming leadership changes in Canada and the United States should impact the market. However, Alexander remains optimistic.

“With the fundamentals that we are seeing take shape, we’re poised to not only sustain the strong level of luxury activity of 2024 but surpass it in 2025.”

Review the full report.

Calgary saw 1,322 sales in December, a three per cent decline over the year prior, but almost 20 per cent higher than long-term trends, the Calgary Real Estate Board (CREB) reports. Overall 2024 sales came in just under 2023’s levels.

“Population gains over the past several years have supported sales activity that has outperformed long-term trends. In 2024, sales would likely have been higher if there was more supply choice, especially in the lower price ranges,” said Ann-Marie Lurie, CREB’s chief economist, in a press release.

“That being said, we did start to see shifts occurring in the market in the second half of the year as supply levels started to improve for higher priced homes.” 

More inventory, lower prices

2,989 units of inventory were available in December—below long-term trends for the month but higher than December 2023 levels and those from early 2024. This was due to more rental options and new home activity.

Likewise, more housing options have relieved some pressure on home prices, which were high in the spring but stabilized in the second half of the year. Annually, total residential benchmark prices improved by over seven per cent. 

Detached homes

Sales of detached homes improved year-over-year in the year’s final quarter, particularly for properties over $600,000, thanks to easing lending rates. Inventory levels went up in this category within the city but varied across districts. Prices rose by almost 11 per cent in 2024, most of which occurred in the spring amid low inventory.

Semi-detached homes

2,355 semi-detached homes sold last year, with an annual gain of five per cent. Inventory levels increased thanks to gains in new listings relative to sales, much of which occurred in the higher-priced City Centre district. This category’s annual average benchmark price increased by nearly 11 per cent to $669,042 in 2024, and prices improved across all districts.

Row homes

Last year, 4,647 row homes sold, over two per cent more than the year prior and the second-highest total on record. This was thanks to an 18 per cent gain in new listings. While improved supply alleviated prices by the end of 2024,  the annual benchmark price rose by 14 per cent. Prices rose across all districts.

Apartment condominium homes

2024’s apartment condominium sales slowed by four per cent compared to 2023, resulting in 7,568 transactions, the second-highest year on record. New listings went up and helped create more balanced conditions. Prices declined in the last quarter but didn’t offset the strong gains from earlier in the year, with the annual benchmark price rising by 15 per cent.

Review the full December 2024 report for Calgary’s city and regional area. 

As 2024 wraps up, it’s clear that Canadian Realtors have seen some big changes—whether it’s new regulations, shifting market conditions, or key decisions from major players in the industry. This year has had its fair share of stories that have left a mark on the industry.

Real Estate Magazine is taking a look at the top five news stories that shaped the year. From government policy changes to shifts in market trends, these stories are bound to influence the direction of the industry in 2025 and beyond.

Competition Bureau investigates CREA

Canada’s Competition Bureau is investigating two of the Canadian Real Estate Association’s policies. It’s looking into whether CREA’s commission rules discourage buyers’ Realtors from offering lower commission rates or whether they affect competition in other ways. It’s also looking into whether CREA’s realtor cooperation policy makes it harder for alternative listing services to compete with the major listing services, or gives larger brokerages an unfair advantage over smaller ones.

CREA has previously told REM the organization is cooperating with the Bureau as part of this investigation phase, and that CREA believes its rules and policies are “both pro-competitive and pro-consumer, including by increasing transparency and helping realtors better serve Canadian property buyers and sellers.”

CREA votes to transition Realtor.ca into taxable entity 

CREA members approved the transition of Realtor.ca from a non-profit entity to a for-profit subsidiary. The change aims to modernize the platform and reduce CREA’s reliance on member dues. 

CREA anticipates establishing the new taxable entity for Realtor.ca by January 2025. Preparations are underway to finalize the legal framework, create an interim board and begin recruiting permanent board members and a CEO. At the same time, the organization is piloting programs like a mortgage pre-qualification tool to improve the platform’s consumer experience and operational readiness. 

CREA Chair James Mabey confirmed that Realtor.ca will feature advertising on non-listing pages, offering curated, relevant content for consumers while generating new revenue streams for the platform 

New mortgage rules to provide temporary relief to Canada’s housing market

Two new mortgage rules, effective Dec. 15, are expected to provide a short-term boost to Canada’s housing market. These include extended 30-year amortizations for first-time buyers and new builds and an increased insured mortgage limit (from $1-million to $1.5-million). 

While these measures may improve purchasing power, experts warn that their impact will be limited by rising home prices and affordability issues. Industry leaders stress that long-term housing recovery requires more focus on supply. 

We’re already seeing the impact of these new rules (coupled with lower interest rates), with some Realtors reporting a much busier than typical December. 

5 consecutive rate cuts from the Bank of Canada

Completing the new mortgage rules, the Bank of Canada made a fifth straight cut in December, reducing its benchmark rate by 50 bps, bringing the rate down to 3.25 per cent. The move is expected to provide relief to the housing market, easing borrowing costs and bringing buyers out of hibernation mode, with some forecasting a traditional spring surge for the housing market. 

OREA CEO Tim Hudak resigns after 7 years of leadership

Tim Hudak, CEO of the Ontario Real Estate Association, announced his resignation in August, following seven years at the helm. In an email to members, Hudak reflected on his tenure, highlighting milestones achieved during his leadership, including significant advocacy wins, new tools for realtors, and a focus on member wellness.

Hudak’s contributions include spearheading the passage of the Trust in Real Estate Services Act and establishing the Ontario Realtor Wellness Program.

OREA has enlisted KCI Talent in its search for a new CEO, while Sonia Richards, chief of staff and board strategy, continues to serve as interim CEO.