Housing Market Predictions for Next 5 Years: 2025 to 2029

The Canadian housing market is expected to experience modest growth from 2025 to 2029. After a period of rapid price increases during the COVID-19 pandemic, the market is anticipated to stabilize, with home prices rising at a slower pace. Analysts predict an annual increase of approximately 1-2%, leading to a total appreciation of about 13-14% over the five-year period.

A key factor contributing to this stabilization is an anticipated increase in housing supply. Efforts to address the shortage of available homes are expected to result in more properties entering the market, providing relief to buyers facing limited options. This increase in supply should help balance the market and moderate price growth.

Mortgage rates are projected to fluctuate during this period. Initially, rates may rise as the Bank of Canada implements measures to control inflation. However, towards the end of the decade, rates are expected to gradually decrease, making home loans more affordable and potentially boosting demand.

Despite these changes, the market is predicted to remain competitive. Factors such as strong job growth, population increases, and limited land availability will continue to drive demand for housing, particularly in urban areas. While the market will cool compared to the pandemic years, it is expected to still favor sellers in high-demand regions.

Affordability challenges are likely to persist, especially for first-time homebuyers. High home prices, coupled with fluctuating mortgage rates, may continue to make it difficult for new entrants to the market. Government policies aimed at improving affordability, such as longer mortgage amortizations and incentives for first-time buyers, may provide some relief but are not expected to fully resolve the issue.

Overall, the Canadian housing market from 2025 to 2029 is expected to experience moderate price growth, increased housing supply, and fluctuating mortgage rates. While these factors may ease some pressures, challenges related to affordability and competitiveness are likely to remain, particularly in urban centers.