2025 Housing Outlook "Uncertain" Amid Geopolitical Shifts, Says CHMC

The Canada Mortgage and Housing Corporation (CMHC) has released its 2025 Housing Market Outlook, highlighting an uncertain future for the country’s housing sector due to global political changes. The report suggests that economic activity will be modest, housing starts will decrease, rents may decline, and home sales could rise in certain areas. These projections are based on a balanced view between low-growth and high-growth scenarios influenced by international events. 

One significant concern is the potential imposition of a 25% tariff by the United States on 10% of Canadian goods. While this could negatively impact Canada’s economy, CMHC believes the effects might be lessened by increased U.S. government spending and a higher demand for imports. Additionally, a reduction in immigration targets between 2025 and 2027 could further slow economic growth. Although lower borrowing costs might boost consumer spending, factors like past inflation, rising unemployment, and higher mortgage renewal rates could offset these gains. 

In the housing market, CMHC anticipates improvements in 2025. Lower mortgage rates and changes to mortgage rules introduced in 2024 are expected to make home buying more accessible for those previously priced out. However, these buyers might face longer loan terms, increased interest costs over time, and larger down payments as home prices continue to rise. 

Resale homes are projected to lead the market due to their relative affordability and immediate availability, meeting the needs of eager buyers. Millennials are expected to drive demand in urban centers as remote work decreases, along with current homeowners looking to upgrade or those facing mortgage renewals after purchasing during the pandemic. 

The type of housing will also influence market trends. Condominium sales and prices may lag in areas reliant on investors, while detached homes are likely to see increased activity in 2025 before slowing down in the following years. 

In summary, Canada’s housing outlook for 2025 is shaped by complex global political factors. While there are opportunities for growth, challenges such as potential trade tariffs, changing immigration patterns, and economic uncertainties require careful navigation by policymakers and stakeholders in the housing industry.