{"id":25587,"date":"2025-04-02T11:11:31","date_gmt":"2025-04-02T18:11:31","guid":{"rendered":"https:\/\/www.roryc.ca\/blog\/?p=25587"},"modified":"2025-04-01T07:45:09","modified_gmt":"2025-04-01T14:45:09","slug":"mark-down-annual-average-growth-forecasts-for-canadian-home-sales-prices","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2025\/04\/mark-down-annual-average-growth-forecasts-for-canadian-home-sales-prices\/","title":{"rendered":"Mark Down Annual Average Growth Forecasts for Canadian Home Sales &#038; Prices"},"content":{"rendered":"<p style=\"text-align: justify;\">Home prices in Canada are now expected to fall in 2025, as the lingering effects of trade uncertainty, affordability challenges, and weak buyer demand take their toll.<\/p>\n<p style=\"text-align: justify;\">TD Economics has revised its forecast sharply downward, now expecting a 3.2% decline in average home prices this year.<\/p>\n<p style=\"text-align: justify;\">\u201cThis much-softer starting point has led us to materially mark down our 2025 annual average growth forecasts for Canadian home sales and prices,\u201d TD economist Rishi Sondhi said in the bank\u2019s latest forecast.<\/p>\n<p style=\"text-align: justify;\">The revised projection follows a double-digit drop in quarterly sales and a mid-single-digit decline in prices in the first quarter, which Sondhi described as \u201cmuch weaker\u201d than TD\u2019s December forecast had anticipated.<\/p>\n<p style=\"text-align: justify;\">TD points to a combination of elevated mortgage rates, a softening labour market, and growing uncertainty around US trade policy, particularly since US president Donald Trump\u2019s January 20 inauguration.<\/p>\n<p style=\"text-align: justify;\">The Canadian Real Estate Association (CREA) had previously flagged that moment as the trigger for a sharp pullback in activity, with February sales recording their steepest month-over-month drop in nearly three years.<\/p>\n<p style=\"text-align: justify;\">Sondhi emphasized that the tariff environment will continue to cast a shadow over the market. \u201cElevated uncertainty and a deteriorating jobs market will yield subdued sales and price growth for much of 2025,\u201d he noted.<\/p>\n<p style=\"text-align: justify;\">While some regional markets will fare better than others, TD expects home prices to fall most steeply in Ontario (down 6.4%) and British Columbia (down 4.1%). Sondhi wrote that these provinces are facing \u201cmuted demand conditions\u201d and supply-demand imbalances \u201cheavily skewed in favour of buyers.\u201d<\/p>\n<p style=\"text-align: justify;\">He also pointed to the Greater Toronto Area (GTA) condo market, calling it \u201cparticularly soft\u201d and a key factor behind the downward pressure in Ontario.<\/p>\n<p style=\"text-align: justify;\">Smaller declines are expected in Prince Edward Island, where TD predicts a 1% drop. But some provinces are expected to see modest price growth, even as forecasts across the board have been marked down. Manitoba, Saskatchewan, and Alberta are projected to outperform slightly, thanks to tighter supply and \u201ccomparatively better affordability,\u201d according to Sondhi.<\/p>\n<p style=\"text-align: justify;\">TD\u2019s housing forecast aligns with its wider economic view that Canada will experience below-trend growth in 2025 and 2026, as trade tensions, weak consumer sentiment, and population trends weigh on demand.<\/p>\n<p style=\"text-align: justify;\">Although interest rate cuts are expected, TD projects the Bank of Canada will lower its policy rate to 2.25% by 2025, its estimated neutral level. Those cuts may not be enough to offset the impact of higher prices and reduced spending power.<\/p>\n<p style=\"text-align: justify;\">\u201cConsumer spending had been improving on lower interest rates, but we expect this to act as a drag on growth as higher prices cut into spending power,\u201d Sondhi said. TD also expects inflation to stay above target through 2025 due to tariffs, before easing toward 2% in the medium term.<\/p>\n<p style=\"text-align: justify;\">TD believes the Canadian dollar will eventually return to the 74\u201376 US cent range, but only once domestic economic growth begins to catch up with that of the US.<\/p>\n<p style=\"text-align: justify;\">Royal LePage, in a separate update, noted that the recreational property market is not seeing the same slowdown.<\/p>\n<p style=\"text-align: justify;\">\u201cWhile the mainstream market is more sensitive to economic shifts, demand in the recreational segment remains steadfast, even during periods of market hesitation,\u201d said Phil Soper, president and CEO of Royal LePage.<\/p>\n<p style=\"text-align: justify;\">Despite the gloomier near-term picture, TD sees room for optimism further out. If tariff tensions ease by the end of 2025, pent-up demand could drive a significant rebound in both home prices and sales the following year.<\/p>\n<p style=\"text-align: justify;\">In that scenario, TD projects that average home prices will rise 4.8% in 2026, with sales jumping 10.1%. However, any recovery will likely be tempered by persistent affordability issues, especially in Ontario and BC.<\/p>\n<p style=\"text-align: justify;\">\u201cThe scale of bounce-back in Canadian average home prices will likely be restrained by poor affordability in key markets like BC and Ontario,\u201d Sondhi wrote.<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.mpamag.com\/ca\/mortgage-industry\/market-updates\/canadian-home-prices-to-fall-as-buyers-wait-out-2025-uncertainty-says-td\/530056\" target=\"_blank\" rel=\"noopener\">TD : Canadian Home Prices to Fall as Buyers Wait Out 2025 Uncertainty<\/a> by Candyd Mendoza | CMP<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Home prices in Canada are now expected to fall in 2025, as the lingering effects of trade uncertainty, affordability challenges, and weak buyer demand take their toll. TD Economics has &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2025\/04\/mark-down-annual-average-growth-forecasts-for-canadian-home-sales-prices\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,13],"tags":[],"class_list":["post-25587","post","type-post","status-publish","format-standard","hentry","category-market-updates","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Mark Down Annual Average Growth Forecasts for Canadian Home Sales &amp; Prices &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2025\/04\/mark-down-annual-average-growth-forecasts-for-canadian-home-sales-prices\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Mark Down Annual Average Growth Forecasts for Canadian Home Sales &amp; Prices &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Home prices in Canada are now expected to fall in 2025, as the lingering effects of trade uncertainty, affordability challenges, and weak buyer demand take their toll. 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