Will Canadian Housing Finally Cool in 2025?
The average Canadian home sells for about $700,000 today, similar to last year. (Orange line in chart below.)
The market has been going sideways for the last couple of years reaching a fine balance between supply and demand.
But going into next year the market faces a couple of headwinds.
The first is slowing GDP growth. We already knew economic output per person has been steadily declining in Canada for the last few years. But the cumulative growth of GDP on a moving average has also been declining.
With the federal government’s plan to slam the brakes on population growth by fixing immigration, we will likely see continued decline in GDP going into next year.
The second issue is with the labour market.
Canada’s unemployment rate has been slowly climbing to now 6.8%. It’s a substantial contrast to the 4.2% rate down in the U.S.
People in our largest city, Toronto, has been struggling more than most. The region’s unemployment rate recently reached 9.2%.
With both the economy and job data going the way they are, it’s likely we’ll see housing prices depreciate across the country next year.
But how much will prices fall? Probably not by much. Maybe by 5% or 10%. Certain parts of the country may be hit harder than others. But overall Canada doesn’t have a history of violent real estate market crashes.
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Random Useless Fact:
