On April 15, 2025, the Canadian Real Estate Association (CREA) released its quarterly forecast for home sales and prices, updating its January outlook to reflect heightened economic and political risks. For 2025, the CREA now anticipates 482,673 residential transactions, a 0.02% decline from 2024, which is a sharp reversal from the 8.6% growth projected in the first quarter forecast in January. The national average home price is forecast to dip 0.3% to $687,898, roughly $30,000 below earlier estimates. Looking to 2026, sales are expected to rise modestly by 2.9% to 496,487 units, with prices edging up 1.2% to $696,074.
Source: CREA
Source: CREA
Shaun Cathcart, CREA’s Senior Economist, explained that in the past, uncertainty around tariffs played a major role in dragging down home sales. However, things have changed. Now, the housing market must brace for the real economic fallout.
On April 16, the Bank of Canada decided to hold its key policy rate steady at 2.75%. Why? Because trade policy remains unpredictable. Tariff fluctuations continue to weigh on economic growth.
In its latest Monetary Policy Report, the Bank painted a troubling picture. It outlined a possible scenario: if a broader trade war unfolds, Canada could slide into a recession. Even worse, inflation could surge past 3% by mid‑2026.
CREA added more fuel to the fire. It warned that forecasts come with major caveats. Interest-rate paths remain unclear. So does the risk of stagflation.
In short, the future is murky. Risks are rising. And the housing market, like the broader economy, must prepare to navigate through uncharted waters.
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