Canada just wrapped up a federal election, and the Liberals are back in power-but this time, with a minority government.
That means they’ll need to work with other parties to get things done. For anyone interested in real estate-whether you’re a homeowner, renter, investor, or just dreaming of buying your first place-this election result matters.
Let’s break down what you can expect from the housing market now that the political dust has settled.
What Did Carney and the Liberals Promise About Housing?
Housing was a hot topic during the campaign, and the Liberals made some big promises. Here are the main ones:
Build More Homes: The Liberals say they want to double the number of homes being built each year, aiming for 500,000 new homes annually. For context, in 2024, Canada built about 250,000 homes.
Make It Easier to Buy Your First Home: They’re offering tax breaks for first-time buyers. For example, if you buy a new home under $1 million, you won’t have to pay GST (that’s a 5% savings).
Speed Up Construction: The Liberals want to cut red tape so builders can get shovels in the ground faster, especially for apartments and condos.
But there’s a catch: With a minority government, the Liberals can’t do everything they want without help from other parties. Some of these promises might get watered down or take longer than expected.
Interest Rates: The Cost of Borrowing Is Coming Down
If you’ve been following the news, you know that interest rates have been a big deal lately. The Bank of Canada (our central bank) sets the key interest rate, which affects how much it costs to borrow money for things like mortgages.
Where Are Rates Now? As of April 2025, the Bank of Canada’s rate is 2.75%. That’s down from over 4% a year ago.
What’s Next? Most experts think we’ll see a couple more small cuts this year, maybe bringing the rate down to 2.25% by the end of 2025.
What does this mean for you?
- If you’re renewing your mortgage or buying a home, your monthly payments could be a bit lower.
- For example, on a $500,000 mortgage, a 0.25% rate cut saves you about $75 a month.
But don’t expect rates to drop back to the rock-bottom levels we saw during the pandemic. The Bank of Canada is being careful because inflation (the rising cost of living) is still a concern.
The Real Estate Market in 2025: Slower, But Not Crashing
Let’s talk about what’s happening right now. The Canadian real estate market has cooled off compared to the crazy days of 2021 and 2022.
Home Prices: The average home price in Canada is around $678,000 (as of March 2025), down about 3% from last year.
Sales: Fewer homes are being sold-sales are down almost 8% compared to a year ago.
More Homes for Sale: There are more homes on the market (+18% compared to last year), which means buyers have more choice and sellers have to compete.
Example: In Toronto, you’ll find more condos for sale than buyers. That’s led to some price drops, especially for smaller units in the downtown core.
But it’s not the same story everywhere:
Alberta and Saskatchewan: These provinces are still “seller’s markets,” meaning there are more buyers than homes for sale.
Ontario and BC:Especially in big cities, it’s more of a “buyer’s market” right now.
What Could Change Now That the Election Is Over?
Here’s how the Liberal win could shake things up:
Build More Homes-But Not Overnight
Building houses takes time. Even if the government starts pushing hard, you won’t see 500,000 new homes pop up next year. It could take years for these policies to really make a dent.
If you’re waiting for prices to drop because of a flood of new homes, you might be waiting until 2026 or later.
Help for First-Time Buyers
The promised GST break could save you tens of thousands on a new home (it won’t impact you if you’re looking to buy a resale home or condo). For an $800,000 home, that’s a $40,000 saving. If you’re a first-time buyer, this could make a real difference.
But keep in mind:
- You still have to qualify for a mortgage (and banks are strict).
- Rising unemployment (up 0.5% this year) means some people might not be able to buy, even with these incentives.
Investors:
Rents are still high (vacancy rates are below 2% in cities like Toronto and Vancouver), so landlords are doing okay. But with more homes coming and possible new taxes, it’s not all smooth sailing.
Renters:
More supply could mean less competition for rentals, but it will take time for new buildings to open.
What About the Economy and particularly Trump's Tariffs?
The broader economy matters, too. If people are worried about their jobs or if businesses aren’t investing, fewer people will want to buy homes.
Trade with the U.S.: Ongoing trade tensions with the U.S. could hurt jobs and confidence.
Unemployment: If job losses increase, demand for homes could drop.
So, What’s Next for Home Prices?
Here’s what most experts are predicting:
2025: Prices will probably stay flat or dip a little more (maybe down 1% overall).
2026: If interest rates keep falling and the economy improves, prices could start rising again (maybe 3–5% growth).
Let’s Break it Down By Region:
Ontario (especially Toronto): Prices might fall a bit more before stabilizing.
Alberta and Prairies: Prices could rise faster because homes are more affordable and there’s still demand.
Quebec: Steady growth, but not a boom.
What Should Buyers and Sellers Do?
Buyers: If you’re waiting for a big price drop, you might be disappointed. But with more homes for sale and lower rates, you have more choice and less pressure to rush.
Sellers: Time to be realistic about your asking price, especially in cities where there’s lots of competition.
Investors: Watch for new rules or taxes, but rental demand is still strong in most cities.
Final Thoughts: Patience Is Key
The election result means there’s a plan to tackle housing, but it won’t happen overnight. Lower interest rates will help, but the real game-changer-more homes-will take years to show up in the market. In the meantime, expect a slow, steady market with lots of regional differences.
If you’re thinking about buying, selling, or investing, now’s a good time to do your homework, shop around, and keep an eye on both government policy and interest rates.
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