After a sluggish and uneven 2024, Canada’s housing market is showing signs of a meaningful rebound — and it may arrive sooner than many expected. According to a new forecast by online brokerage Zoocasa, spring 2025 could mark the return of a competitive, high-volume real estate season, driven by stabilizing interest rates and a surge in buyer confidence.
Lauren Haw, Broker of Record and Industry Relations Officer at Zoocasa, outlines several key trends expected to shape the next 12 months in their full 2025 housing market outlook. The original report is available here:
A traditional spring market — at last
“Next year, Canadians can anticipate a lively spring market kicking off as early as March,” Haw explains. With interest rates showing signs of stability — and even potential for mild reductions — sidelined buyers who sat out the past year are expected to re-enter the market, triggering a cascade of renewed activity. This shift is especially noteworthy after a quiet spring in 2024, where increased listings didn’t translate into major sales volume.
Zoocasa predicts that the growing wave of buyer interest will also motivate hesitant sellers to list, restoring a sense of momentum to urban markets like Toronto and Vancouver.
Mortgage renewals may trigger downsizing
One of the more significant factors cited in the report is the coming wave of mortgage renewals. According to CMHC data, roughly 1.2 million Canadian mortgages will reset in 2025 — many of them moving from ultra-low pandemic-era rates (below 2%) to more typical levels (above 3%).
This change may put pressure on household budgets, particularly for homeowners who stretched themselves during the 2020–2021 buying rush. As a result, Zoocasa expects to see some homeowners list their properties as part of a downsizing strategy — increasing inventory and creating fresh opportunities for buyers.
Buyer competition is likely to return
With fixed mortgage rates now hovering around 3.75% and likely to drop further into the low 3s, Zoocasa anticipates renewed urgency among home seekers. This is especially true for first-time buyers and end-users who have been watching from the sidelines. Lauren Haw even predicts that “FOMO” — the fear of missing out — could make a return to the market in early 2025.
This combination of pent-up demand and improving affordability conditions could make the first half of 2025 surprisingly competitive. For buyers, it may mean acting quickly before prices begin to rise again. For sellers, it could present a rare window to list while inventory is still tight and rates are still low.
Investors still face hurdles
Despite the brighter outlook for homeowners and buyers, the picture remains more complex for investors. Zoocasa’s analysis highlights continued challenges in the condo and multiplex market. High borrowing costs and weak rental yield growth are putting pressure on investment properties, especially those purchased with short-term profit assumptions.
In fact, recent data from Urbanation shows that new condo sales in the GTA and Hamilton Area dropped 81% year-over-year in Q3 2024 — the lowest quarterly total since Q1 1995. Meanwhile, ownership costs for condos have risen nearly 60% since 2020, while rental income has failed to keep pace.
According to Haw, this imbalance will likely continue in 2025, especially as multi-residential mortgage renewals cause more investors to reassess their portfolios. Some may opt to sell, while others hold in hopes of stronger rental demand or future rate cuts.
The big picture: a market in motion
While no one can predict the exact shape of the next real estate cycle, Zoocasa’s forecast points to a shift back toward more familiar territory — strong spring sales, active buyers, and a more balanced market dynamic. If interest rates ease and listing activity grows as expected, 2025 could mark the start of a new chapter for Canadian real estate.
As always, buyers and sellers are encouraged to stay informed and work with professionals who understand local market dynamics. Whether you’re planning to move in the next few months or simply watching the market, staying ahead of the trends will help you make better decisions.