TORONTO, January 14, 2025 – The aggregate price of a home in Canada rose by 3.8 per cent year-over-year to $819,600 in the fourth quarter of 2024, according to the Royal LePage House Price Survey released Tuesday. On a quarterly basis, national home prices remained relatively stable, posting a modest increase of 0.5 per cent.
While market activity improved in the final months of 2024 following sluggish conditions over the summer, price appreciation stayed moderate. Analysts say the recovery is being supported by declining interest rates, updated mortgage rules, and renewed buyer confidence.
“Several converging factors are revitalizing Canada’s real estate market and making home ownership more attainable,” said Phil Soper, president and CEO of Royal LePage. “Interest rates have declined significantly, and we anticipate further reductions in 2025. We believe the Bank of Canada could lower rates by another 100 basis points by year-end, steadily improving affordability.”
Soper noted that newly implemented mortgage regulations are already benefiting younger buyers by expanding borrowing capacity and reducing monthly carrying costs. He added that while global geopolitical tensions and trade-related uncertainty may influence consumer confidence, Canada’s housing market is largely insulated from external pressures in the short term.
According to the report, the national median price of a single-family detached home increased 4.9 per cent year-over-year to $855,900. Condominium prices rose 1.5 per cent to $592,700. Quarter-over-quarter, the median price of a detached home rose 0.6 per cent, while condo prices were up just 0.4 per cent.
Sales volumes in major Canadian cities rose sharply in the final quarter of 2024, with national home sales exceeding the ten-year moving average for the first time since the post-pandemic slowdown began in 2021. As affordability improved, previously sidelined buyers returned to the market, helping to build momentum through year-end. Soper noted that while weather may influence weekly regional activity, demand is expected to remain strong throughout the winter and into the spring. He added that price growth in 2025 will likely remain modest, contributing to a more balanced environment compared to the overheated conditions seen in 2021 and 2022.
The housing market’s recovery comes against the backdrop of political uncertainty following the resignation of Prime Minister Justin Trudeau and the prorogation of Parliament on January 6. A federal election is widely expected by mid-spring, once the Liberal Party selects a new leader on March 9. Soper said the housing crisis remains a priority issue that transcends politics, noting that “the next government must prioritize addressing the supply crisis, which affects millions of Canadians.”
Pending legislation not passed before prorogation has been nullified, including the proposed increase to the capital gains tax inclusion rate. Despite the lack of formal approval, the Canada Revenue Agency is expected to continue applying the tax change until a new direction is given.
New lending rules introduced at the end of 2024 are also expected to contribute to improved access to homeownership. These include the expansion of 30-year amortizations on insured mortgages for all first-time homebuyers and buyers of newly constructed homes, an increase in the mortgage insurance cap from $1 million to $1.5 million, and the removal of the stress test requirement for uninsured borrowers switching lenders. These measures are particularly significant in high-priced markets like Toronto and Vancouver.
“These regulatory changes mark a significant shift in improving access to home ownership for Canadians,” said Soper. “By expanding amortizations and raising the mortgage insurance cap, more people will be able to afford a home. The removal of the stress test for those renewing mortgages will also lead to more competitive rates from lenders.”
Soper acknowledged that longer amortization periods could result in higher total interest paid, but said the immediate benefit of lower monthly payments would help address one of the most pressing barriers to affordability. He concluded that these changes, combined with falling interest rates and increased housing supply, would support a steady and balanced real estate market in the year ahead.
