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As 2024 comes to a close, the Canadian real estate industry has seen notable changes. Here’s a quick look at the top five stories that have had the most impact this year, setting the stage for 2025 and beyond.

1. Competition Bureau Investigates CREA

The Canadian Competition Bureau is investigating CREA’s commission rules and cooperation policy, examining if they hinder competition or give larger brokerages an unfair advantage. CREA is cooperating and believes its policies support competition and benefit consumers.

2. CREA Votes to Make Realtor.ca For-Profit

CREA members approved a plan to transition Realtor.ca into a for-profit subsidiary starting in January 2025. This move aims to modernize the platform, reduce reliance on member dues, and explore new revenue streams through features like advertising.

3. New Mortgage Rules Offer Short-Term Relief

New mortgage rules introduced in December extend 30-year amortizations for first-time buyers and new builds and raise the insured mortgage limit from $1 million to $1.5 million. While these changes could help with affordability, experts emphasize that increasing housing supply is crucial for long-term recovery.

4. Bank of Canada Cuts Interest Rates Again

The Bank of Canada cut its benchmark rate to 3.25% in December, marking a fifth consecutive reduction. This is expected to lower borrowing costs and stimulate buyer activity, leading to a busier market heading into 2025.

5. OREA CEO Tim Hudak Resigns

Tim Hudak resigned as CEO of the Ontario Real Estate Association in August after seven years. He was instrumental in key initiatives like the Trust in Real Estate Services Act. OREA is now searching for a new CEO, with Sonia Richards serving as interim leader.

These stories have had a major influence on Canadian real estate this year and will continue to shape the industry in the months and years ahead.

This fall has been an unusually busy time for much of Canada’s housing market, with some areas continuing to see strong activity into December, fueling optimism for 2025. The positive outlook is largely driven by recent federal policy changes, including continued interest rate cuts by the Bank of Canada and new mortgage reforms designed to make it easier for people to buy homes.

In November, Canadian real estate sales surged 26% compared to last year, with some areas like Montreal, the Greater Toronto Area, and Greater Vancouver seeing even bigger increases. This marks a significant recovery after a slow period following the pandemic. With more people returning to the market, many are expecting prices to rise next year, which is motivating both buyers and sellers.

However, despite increased activity, the number of available homes is still low, driving up prices. Some markets are seeing their busiest Decembers in years, with more listings expected early in the new year as sellers try to get ahead of spring competition.

Not all areas are experiencing the same level of activity. While some regions are slowing down, others, like Calgary, are seeing strong sales well into December, thanks to interest rate cuts and a positive outlook for 2025. There’s also optimism that new lending rules will make housing more accessible, especially in expensive markets like Vancouver.

Looking ahead, many experts believe the market will stay active through 2025, with more buyers entering the market and limited inventory potentially pushing prices higher.

Canadian real estate seems to be on the path to recovery, with interest rates falling, house prices down from their peaks, and affordability slowly returning. The government is actively addressing housing issues, but the big question is: when will the market truly recover?

It’s felt more like a long, drawn-out road trip than a clear comeback. Buyers have been waiting on the sidelines, hoping for the right moment to jump in—either waiting for prices to dip further or hoping for a sign that the market has bottomed out. Ironically, those waiting for the “bottom” may have missed it, as the market has seen steady price increases in recent months.

While September seemed subdued, recent data shows signs of a market turnaround. Home sales increased by 2.8% in November, marking the second consecutive month of growth. Lower rates, more buying power, and new mortgage policies have drawn sidelined buyers back into the market, with strong activity in major cities like Toronto, Vancouver, and Montreal.

However, this spike in activity raises some questions: is it a real recovery, or just a temporary boost driven by policy changes? The market still feels relatively flat compared to the highs of the pandemic, and there are signs that the recovery remains fragile. Though prices are rising, they’re still lower than a year ago, and the supply of homes remains tight, with fewer listings coming to market.

Looking ahead, much depends on the upcoming spring market. While optimism is building, potential challenges like a possible recession and rising unemployment could still slow the recovery. The key will be whether the momentum from the past few months can carry through.

In the meantime, the dream of homeownership is still tough for many, especially first-time buyers, who face rising prices and fewer available homes. For sellers, however, the market is leaning in their favor, with competition among buyers growing as inventory remains low.

In short, Canadian real estate is showing early signs of recovery, but it’s unclear whether this momentum will last or if it’s just a brief reaction to lower rates and policy changes. The spring market will be a critical test.

Home sales in Canada continued to rise in November, up 2.8% from October and 18.4% higher than in May, before the first interest rate cut. The boost was driven by gains in Greater Vancouver, Calgary, Greater Toronto, Montreal, and some smaller cities in Alberta and Ontario.

"Sales not only increased, but tighter market conditions also pushed prices up at the national level for the first time in over a year and a half," said Shaun Cathcart, CREA’s Senior Economist. "With the Bank of Canada’s recent rate cut and changes to mortgage rules, we might see a more active winter market than usual."

November Highlights:

• National sales rose 2.8% month-over-month.

• Sales were 26% higher than November 2023.

• New listings were down 0.5% month-over-month.

• The HPI increased by 0.6% from October but is down 1.2% year-over-year.

• The average sale price rose 7.4% from last year.

The sales-to-new listings ratio tightened to 59.2%, up from 57.3% in October, indicating a shift toward a more balanced market.

At the end of November, there were over 160,000 properties listed for sale—8.9% more than last year, but still below the typical level for the season. Inventory dropped to 3.7 months, the lowest in 14 months.

The national average home price in November was $694,411, up 7.4% from last year.

Home sales in Vancouver saw a nice boost in November, thanks to a jump in new listings that helped keep prices steady, according to the local real estate board.

The composite benchmark price for November was $1,172,100, which is slightly down by 0.9% compared to last year and basically the same as October.

Real estate agents in Greater Vancouver reported a 28.1% increase in the number of homes sold compared to November 2023. With a more balanced market, many buyers took advantage of the opportunity. In total, there were 2,181 sales in November, which, while still 12.8% below the 10-year average, is an improvement over the 1,702 sales from the same month last year.

There were also 3,725 new listings in November, a 10.6% increase from 2023 and 5.4% above the seasonal average for the past decade. Overall, the number of active listings in the region reached 13,245, up by 21.2% from last year.

While prices remained stable last month, if the supply of homes doesn’t keep up with rising demand, buyers could face higher prices in 2025. For now, though, the market seems to be holding steady.

As we head into winter, Calgary’s housing market is following typical seasonal trends, with slower activity compared to the fall, but year-over-year demand remains strong. November saw a mix of increased sales in detached, semi-detached, and row homes, though apartment condo sales slowed. Overall, 1,797 sales in November were on par with last year and 20% above long-term averages.

Detached Homes:
Sales for homes priced above $600,000 are rising, while lower-priced homes face limited supply. Although inventory improved, 85% of homes for sale were priced over $600,000, creating varied market conditions. The benchmark price for detached homes was $750,100, up over 7% from last year.

Semi-Detached Homes:
There were 173 semi-detached sales in November, up nearly 5% from last year, supported by more listings and higher supply. With two months of supply, conditions still favor sellers, particularly for homes below $700,000. The benchmark price was $675,100, nearly 8% higher than last year.

Row Homes:
Sales of row homes showed continued strength, rising nearly 3% year-to-date. Despite inventory improvements, supply remains tight with about two months of available homes. The benchmark price was $454,200, up nearly 7% from last year.

Apartment Condominiums:
Sales for apartment condos slowed from last year’s record, but still remained well above long-term trends. Increased listings pushed supply levels higher, easing price pressure. The benchmark price was $337,800, up 9% from last year.

Regional Highlights:

• Airdrie: Supply levels are returning to pre-2020 norms, with a 4% increase in the benchmark price, now at $543,300.

• Cochrane: A surge in new listings drove strong sales, with the benchmark price at $568,600, up 4% from last year.

• Okotoks: A dip in new listings kept inventory low, with prices rising 6%, bringing the benchmark price to $624,000.

Overall, the market remains active, though conditions vary by property type and price range.

The Canadian housing market is set to find its footing in 2025, as lower interest rates and new lending rules are expected to attract more buyers. The real estate company predicts that the average home price in Canada will rise by 6% year-over-year, reaching $856,692 by the fourth quarter of 2025, aligning with long-term trends.

Single-family detached homes are expected to see a 7% price increase, hitting a median value of $900,833, while condos are forecast to grow by 3.5%, reaching $605,993. "There’s a growing backlog of buyers ready to enter the market, and upcoming changes to mortgage lending rules will help boost Canadians' borrowing power," says Phil Soper, President and CEO of Royal LePage.

Regional Price Trends: A Strong Demand Across Canada

The forecast suggests price growth in major Canadian markets, with Quebec City leading the way with an 11% price increase. Edmonton and Regina are expected to see a 9% gain each. Greater Montreal is predicted to rise by 6%, while the Greater Toronto Area is projected to grow by a more moderate 5%. Metro Vancouver is expected to see a 4% increase.

Good News for First-Time Buyers: New Lending Rules

Starting December 15, 2024, new mortgage rules are expected to help first-time buyers and those purchasing new homes. These changes include eligibility for 30-year amortizations on insured mortgages and an increase in the mortgage insurance cap from $1 million to $1.5 million.

First-time buyers will be the main beneficiaries of these changes, as they’ll be able to borrow more with a smaller down payment, bringing them closer to owning their first home. This will likely encourage more builders to start new projects, which is exactly what the market needs.

What to Expect in 2025

The first quarter of 2025 is expected to bring the strongest gains, driven by an early spring market. National home prices are projected to rise 2% from Q4 2024 to Q1 2025. After that, growth is expected to slow slightly, with 1.5% gains in the second and third quarters, and 1% in the final quarter of the year.

2025 will bring a sense of normalcy to the market. After a few years of unusual ups and downs, the signs point to a return to stability next year. The recent shift in the Bank of Canada’s monetary policy—from focusing on fighting inflation to boosting the economy—has contributed to this optimism.