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Making a larger down payment usually results in smaller mortgage payments, and this is particularly true in Calgary's current, pricier resale housing market.

A recent study shows that making a larger down payment can significantly reduce monthly mortgage payments by lowering the overall loan amount. Many first-time buyers manage to save up a 5% down payment, but if they receive additional help from family, which is becoming more common in Calgary, it can make a big difference in reducing their future monthly payments.

The study, conducted by a national realty firm, examined the impact of larger down payments on mortgage payments in several Canadian cities, including Calgary. For example, in Calgary, where the average home price at the end of 2024 was approximately $624,000, a $50,000 down payment (around 8%) would result in a monthly mortgage payment of roughly $3,104. Calgary ranked lower than other cities, where $50,000 would cover a larger portion of the purchase price.

In Canada, to qualify for mortgage insurance, a minimum 5% down payment is required. This insurance is necessary unless the buyer can make a down payment of at least 20%. For comparison, Thunder Bay had the lowest average home price in the study at $282,000. A $50,000 down payment there would cover nearly 18% of the home’s price, resulting in a monthly payment of just $1,240.

The study also looked at larger down payments, increasing by $50,000 increments up to $250,000. In Calgary, a $250,000 down payment would cover 40% of the average home price, lowering the monthly mortgage payment to around $1,945. Meanwhile, in Greater Vancouver, where the average home price is significantly higher, $250,000 would only cover about 21% of the $1.2 million price, leading to a monthly payment of $5,009.

Some realtors advise that first-time buyers carefully consider their mortgage options before committing to a 20% down payment to avoid insurance premiums. In some cases, putting down just under 20% can secure a better mortgage rate, and buyers may also be able to arrange bridge financing to assist with the down payment.

With the spring market approaching, it's crucial for buyers to ensure their finances are in order, especially given Calgary's competitive market for single-family detached homes. The benchmark price for these homes rose 5% to $760,500 in February year-over-year.

Experts suggest that buyers should consider using the maximum amount they are approved for to purchase a home that meets their needs. Instead of buying a fixer-upper for $600,000, it might be wiser to use the full borrowing limit to buy a home that doesn’t need repairs, even if it means a slightly higher monthly mortgage payment. Everyone's financial situation is unique, but it's important not to be afraid to stretch your budget if it’s affordable.

In February 2025, the Greater Edmonton Area real estate market saw 1,825 residential units sold, marking a 14.3% increase from January, although down by 7.1% compared to February 2024. New residential listings reached 2,723, up by 13.2% from January but down slightly by 0.4% from the same month last year. Overall, inventory in the Edmonton area grew by 11.4% month-over-month, although it’s still down by 13.4% compared to February 2024.

Breaking it down by property type, 1,015 detached homes were sold, an 18.6% increase from January, but 12.3% fewer than last year. Semi-detached sales were up 7.5% from January and 11.4% higher than February 2024, with 215 units sold. Row/townhouses saw a strong 23.4% increase from the previous month, as well as a 3.9% rise from last year. However, apartment condominium sales dropped 9.2% from last year and 0.3% from January.

The average price of a residential property in Edmonton was $449,554, up 2.6% from January and 10.5% higher than February 2024. Detached homes sold for an average of $567,913, a 1.2% increase from January and 11.9% higher than last year. Semi-detached homes averaged $420,786, a slight 0.1% decrease from the previous month, but up 8.9% compared to last year. Row/townhouses had an average price of $300,818, down 3.5% from January, but up 9.1% year-over-year. Apartment condos saw a significant 7.3% increase from January, averaging $217,373, and a 19.9% rise from the previous year.

The MLS® Home Price Index composite benchmark price in the Edmonton area stood at $428,800, reflecting a 2.3% increase from January and a 12.3% increase from February 2024.

Detached homes were on the market for an average of 39 days, a 12-day reduction from January. Semi-detached homes averaged 26 days on the market, 11 days less than the previous month. Row/townhouses took 28 days on average, down nine days from January, while apartment condos were on the market for 48 days, reflecting a nine-day decrease. In total, all residential listings spent an average of 37 days on the market, down 11 days from January and 13 days from February 2024.

Cochrane
In February, Cochrane saw a rise in both sales and new listings. Sales reached 75 units, and new listings climbed to 126, both higher than last year and above the long-term averages. Inventory increased by more than 48%, totaling 196 units— the highest seen since spring 2021, though still below typical February levels. This uptick in inventory brought the months of supply to 2.6 months, the highest since the pandemic, but still lower than historical levels. Despite tighter conditions, prices picked up, with the benchmark price increasing by over 5% year-over-year to $577,100.

Okotoks
In Okotoks, February saw a 4% decline in sales, with 45 units sold, but this was still in line with long-term trends for the month. New listings increased by 7%, reaching 60 units, though still below typical February levels. Inventory rose by 19% from 2024 to 69 units, but it was still much lower than the historical average for the month. With tighter inventory, the months of supply dropped to just 1.5 months, well below the usual February levels. Even with these tighter conditions, the benchmark price remained flat compared to January and was just slightly up by under 1% from last year.

Airdrie
The Airdrie market in February followed typical trends, with a slight dip in sales while new listings and inventories rose. Sales dropped by about 9%, totaling 123 units, while new listings increased by nearly 23%, reaching 225 units. This combination of fewer sales and more listings pushed inventory up to 345 homes, more than double what was seen last year. As a result, months of supply went up to nearly three months, which is in line with long-term averages and the highest level since before the pandemic. The benchmark price stayed stable at $537,600, only 1.6% higher than February 2024 but still below fall prices

Inventory levels saw a significant year-over-year increase for the second consecutive month, rising by 76% to 4,145 units in February. Most of the growth was in homes priced under $500,000, driven by an increase in more affordable apartments and townhouses. The overall months of supply remained steady at 2.4 months, double what it was a year ago. Apartment-style units had the most supply, at 3.1 months.

February saw 1,721 sales, which, while above average for the month, were 19% lower than last year and well below the post-pandemic peak. New listings reached 2,830, in line with typical February numbers. The sales-to-new listings ratio was 61%, higher than average but lower than the past three years.

While more homes were listed, fewer were sold compared to February 2024, signaling the easing of the seller’s market. This shift has slowed price increases, which is good news for buyers.

The unadjusted benchmark price for residential properties in February was $587,600, relatively stable compared to late 2024 and about 1% higher than last year. Prices varied across districts, with the City Centre and North seeing declines, while the East district saw the highest growth at over 3%.

For detached homes, sales dropped by nearly 20% to 765 units, but new listings rose by almost 6%. This led to a 61% increase in inventory, reaching 1,698 units. Prices rose across all districts, with the City Centre seeing the largest increase at nearly 8%. The benchmark price for detached homes was $760,500, up about 5% from last year.

In the semi-detached market, new listings increased by 7%, but sales dropped by nearly 14%, pushing inventories up by 46%. The benchmark price rose by 7% to $683,500, driven by gains across most districts, with the City Centre and South districts seeing the biggest increases.

Row housing saw a 9% drop in sales and a 4% increase in new listings, raising inventory to 655 units, more than double last year’s levels. The benchmark price increased nearly 3% year-over-year to $446,880.

For apartment condominiums, sales fell by 26%, but new listings reached a record high. Inventory rose by 90%, and the benchmark price increased by almost 4% to $334,200, with the West district seeing the most significant growth at over 8%.

The housing market is showing some signs of growth, but caution remains, according to a recent report. It points to the uncertainty surrounding a potential trade war with the U.S. as a key concern. RBC Economics warned that U.S. tariffs on Canadian exports could hinder the housing recovery.

On a more positive note, demand has been picking up recently, fueled in part by lower mortgage rates. There’s also been an increase in housing inventory across Canada since 2021, though it still falls short of long-term averages.

In terms of ownership costs, they remain higher than typical, making up around 52% of household income. While this is an improvement from the peak in 2023, where it reached nearly 64%, it still exceeds the levels seen in the 2000s and 2010s.

The decline in immigration levels presents both challenges and opportunities for the housing market. While fewer immigrants may reduce demand and help moderate prices, it could also lower sellers' confidence in the market.

Looking ahead, RBC forecasts that home sales will likely remain close to historical averages, thanks to lower interest rates. Property values are expected to increase modestly through 2027. Alberta is projected to see growth, with prices and sales rising by 4-5%, while British Columbia and Ontario are expected to experience stable conditions.

RBC also cautioned that a trade war with the U.S. could lead to economic instability and job losses, potentially reducing demand even further. However, this could also prompt the Bank of Canada to lower interest rates even more, which would make mortgages more affordable and homes within reach for more buyers.

Toronto's real estate market may still be one of the most unaffordable in the world, but it's seen a noticeable decline over the past year. While the biggest drops have been in the condo market — which has suffered after its peak driven by investors — there's now an abundance of listings, giving buyers a lot more options.

Though prices have remained relatively flat due to a lack of significant activity, there’s still room for negotiation. In fact, several neighbourhoods are seeing even detached homes fall below the crucial $1 million mark.

A recent market analysis has shared a list of these more affordable areas, which are perfect for anyone looking to buy on a budget.

The cheapest place in the GTA for single-family homes right now is Central Oshawa, where you can snag a house for about $655,000 — less than the cost of a typical condo in most of the region, including downtown Toronto. Other affordable spots in Oshawa include Eastdale-Donevan and Windfields, with median home prices of $760,000 and $782,500, respectively.

By comparison, the average price for a detached home in the GTA was around $1,377,430 in January 2025, while a semi-detached home is about $1,047,728. In the 416 area, those numbers jump to $1,579,386 and $1,154,505, respectively.

The analysis also found that out of over 400 neighbourhoods, only 53 had single-family homes selling for under $1 million. Additionally, 64% of prospective buyers said they’d prefer a house over a condo.

In January 2025, Canadian MLS® Systems experienced a notable increase in new home listings, up by double digits compared to December 2024. However, sales activity slowed towards the end of the month, likely due to concerns about a potential trade war with the U.S.

Although sales dropped by 3.3% month-over-month in January, most of the decline was due to a slowdown in the final week of the month. On the other hand, new listings surged by 11% compared to December, representing the largest seasonally adjusted monthly increase in new supply since the late 1980s, excluding the pandemic period.

With sales slowing and new listings rising, the national sales-to-new listings ratio dropped to 49.3%, down from the mid-50s in the last quarter of 2024. A balanced market typically has a ratio between 45% and 65%, with the long-term average around 55%.

By January’s end, about 136,000 properties were listed across Canadian MLS® Systems, a 12.7% increase from the previous year, though still below the usual 160,000 listings for this time.

At the close of January, there were 4.2 months of inventory nationwide, an increase from the high 3s in late 2024. The long-term average is five months, with a seller’s market below 3.6 months and a buyer’s market above 6.5 months.

The National Composite MLS®  has remained relatively stable over the past year, with price softness in B.C. and Ontario offset by rising prices in the Prairies, Quebec, and the East Coast.

The national average home price stood at $670,064 in January 2025, a 1.1% increase from January 2024, marking the first year-over-year rise since March 2024, though modest.

In January 2025, Canadian MLS® Systems saw a significant 11% increase in new listings compared to December 2024, marking the largest jump since the late 1980s (aside from the pandemic). However, sales slowed toward the end of the month, likely due to concerns over a potential trade war with the U.S.

Sales dropped 3.3% from December, mainly in the last week of January. Despite the dip in sales, the number of homes listed increased. This combined with fewer sales has softened the market, particularly in British Columbia and Ontario, according to CREA’s Senior Economist.

The national sales-to-new listings ratio fell to 49.3%, down from the mid-to-high 50s in late 2024. Historically, this ratio hovers around 55%, which suggests the market is shifting toward a more balanced situation.

By the end of January, there were nearly 136,000 homes listed, up 12.7% from last year but still below the long-term average of 160,000 listings for the time of year.

Looking ahead, while uncertainty over tariffs may hold some buyers back, others might benefit from a softer pricing environment and lower interest rates. Those considering buying or selling in 2025 should consult a local REALTOR® for guidance.

Nationally, inventory rose to 4.2 months, slightly above the long-term average of five months. In terms of home prices, the National Composite MLS® Home Price Index remained nearly unchanged, down just 0.08% from December 2024. Year-over-year, the national average home price reached $670,064, a 1.1% increase from January 2024.

Montreal’s real estate market has started 2025 strong, completing a two-year recovery. January saw both sales and prices rise, reinforcing the city’s status as one of Canada’s top housing markets.

Sales Return to Pre-Pandemic Levels

Resale transactions have surpassed 54,000, bringing activity back to pre-pandemic levels. The Quebec Professional Association of Real Estate Brokers (QPAREB) reported 2,812 residential sales in January 2025, a 36% increase from the previous year. Single-family homes on the Island of Montreal saw a notable 55% rise in sales.

Tight Inventory Gives Sellers the Advantage

As more buyers return, the number of listings remains low. Despite a seasonal 11% rise in new listings, inventory is down by 4%, keeping sellers in control of price negotiations. Areas surrounding the Island of Montreal are particularly tight, with less than four months of inventory available.

Prices and Demand Keep Rising

Home prices continue to climb. In January, the median price of single-family homes rose more than 10% year-over-year, while condos increased by nearly 8%. This upward trend is expected to continue through 2025, possibly accelerating.

Interest Rates and Market Sentiment

The market rebound is supported by recent interest rate cuts and new homeownership initiatives. Many buyers who had been waiting are now re-entering the market. While some economic uncertainty has affected consumer confidence, trade developments with the U.S. could lead to further rate cuts, boosting buyer support.

Some developers warn that impending U.S. tariffs on Canadian steel and aluminum could significantly harm the housing sector by raising the costs of essential construction materials. A trade association representing over 4,000 companies involved in development and renovation expressed concerns that the tariffs might trigger an economic slowdown and reduce investment in residential real estate.

The group’s leadership cautioned that this could deal a "brutal blow" to the housing market and worsen housing affordability. They pointed out that in an environment already affected by low profit margins, high interest rates, and rising input costs, additional cost increases could make builders anxious. The situation was described as creating "chaos" in the development market.

On Monday, U.S. President Donald Trump signed an executive order imposing a 25% tariff on steel and aluminum imports, set to take effect on March 12. Trump has also threatened to impose a 25% tariff on a wide range of Canadian imports, including a 10% tariff on Canadian energy, though he has delayed these actions until at least March 4 in connection with border security commitments.

The concern is that rising construction material costs would push up home prices in Canada, which are already under pressure due to inflation. Costs for materials like lumber increased during the pandemic and have not returned to pre-COVID levels. Reducing U.S. demand for Canadian products could lead to less production, which would, in turn, raise prices domestically.

Additionally, retaliatory tariffs could further drive up costs, as Canada exports about $20 billion worth of steel and aluminum to the U.S. annually. There are fears that if tariffs extended to other construction materials like cement, gypsum, and lumber, costs could skyrocket, making construction projects unfeasible.

While Canadian builders may still be able to construct homes, the rising costs could make them less affordable for many consumers.

In 2024, Calgary homebuyers needed a lower annual income to qualify for a mortgage on an average-priced home compared to the previous year. The report showed that buyers in Calgary saw a reduction in income needed to qualify for a mortgage with a 20% down payment and a five-year fixed mortgage.

 At the beginning of 2024, a Calgary buyer needed to earn about $116,000 a year to qualify for a mortgage with a 5.71% interest rate, factoring in the federal stress test (which required the buyer to afford a 7.71% rate). By December 2024, that same buyer needed only $113,500 a year, even though the average price of homes in Calgary had increased. At the start of the year, the average home price was $572,400, and by the end of 2024, it had risen to over $605,000.

 Other cities saw similar trends. In Toronto, buyers needed $12,400 less in annual income, despite a slight drop in home prices. In Vancouver, buyers needed $12,100 less, with an income requirement of $216,700 to purchase a home priced at $1,171,500.

 On the other hand, Edmonton experienced an increase in income required by the end of 2024. Buyers there needed $83,330, up by $1,050 from earlier in the year, to qualify for a mortgage on a home priced around $435,000.

 A city in New Brunswick, experienced the biggest increase, with a $6,130 rise in income requirements to $73,640, partly due to a significant $54,000 jump in average home prices, which reached $325,000.

Emerging Trends in Real Estate, an annual report by PwC and the Urban Land Institute, surveys real estate professionals globally to identify trends in investment, development, and markets. The 2025 report highlights Calgary as a rising star in real estate investment, ranking No. 1 for overall prospects due to its growing tech sector and strong population growth. Calgary’s CMA added nearly 96,000 people in the past year, with a third coming from interprovincial migration.

The report notes the greatest investment opportunities are in Calgary’s single-family and multi-family markets, with housing starts reaching a record 24,369 in 2024. Despite rising construction costs, the city’s relatively affordable housing continues to attract people, though increasing demand is expected to push rents up by 3.4% in 2025. Still, average rents remain lower than Toronto or Vancouver.

While Calgary’s office space vacancy rate hit 30.3% in 2024, the city is addressing this with a program to convert office buildings into residential and mixed-use spaces, offering funding to developers. The industrial market remains strong, with a 3.3% vacancy rate, and Calgary’s role as a distribution hub for Western Canada is expected to drive continued demand.

With another record year of housing starts expected in 2025, Calgary’s development initiatives should help ease housing pressures, especially for first-time buyers and renters.