7/23/2025
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Posted in Canadian Housing Market Predictions by Vanguard Realty | Back to Main Blog Page
Canada’s housing market is showing signs of recovery, with a majority of cities reporting home price increases, yet a significant spike in values remains unlikely. Phil Soper, president and CEO of Royal LePage, indicated that while buyer activity is returning, ample housing supply is expected to temper significant price inflation, in a recent Financial Post interview.
Royal LePage’s latest home price survey revealed that 60% of the 64 cities included in its composite saw home price gains. Notably, Toronto and Vancouver, which lagged in the initial recovery, experienced a surge in activity in late May and June. “Activity levels, [particularly the number of homes trading hands], are up almost double digits,” Soper said, identifying this as a key indicator of future price growth.
Despite the uptick in transactions, Royal LePage has revised its annual home price forecast downward. Initially projecting a 6% increase for the year, the forecast was first adjusted to 5% and then further to 3.5%. This revision is largely attributed to the timing of transactions, with much of the activity concentrated in the middle of the year, leaving insufficient time for a full recovery, particularly in the major markets of Vancouver and Toronto. Toronto, for instance, is still anticipated to see a modest 2% price increase by year-end.
Other observers including RE/MAX Canada area vice president Kingsley Ma have cautioned against expecting prices to rebound anytime soon. In a recent interview with Canadian Mortgage Professional, Ma said he's expecting a "healthy, balanced market" to persist for the rest of the year, offering plenty of opportunities for buyers as the pendulum swings away from a seller's advantage.
The current market is characterized by what Soper describes as ‘soft demand,’ particularly evident in Southern Ontario and the Lower Mainland of British Columbia. He views this not as a structural problem, but rather a psychological one, as underlying economic indicators—including job reports, inflation rates, and mortgage default rates—remain positive. People are getting used to the current market conditions, similar to how they adapted to the pandemic, Soper observed.
But while many buyers will welcome a milder pace of price growth, or even a trend towards lower prices in many markets, affordability challenges are expected to persist. That's partly because there's no sign that interest rates will decline anytime soon, and Alberta Central chief economist Charles St-Arnaud has also highlighted the likelihood of rates remaining elevated for the foreseeable future.
“I think one of the things consumers will have to adapt to is realizing that the low-interest-rate regime that we were in the whole decade after the global financial crisis and during the pandemic era is not coming back,” St-Arnaud told CMP.
Source: Canadian Mortgage Professional
Canadian Home Sales, Canadian Housing Market, Canadian Housing Market Slowdown
