As we step into 2025, Canada’s real estate market faces a landscape shaped by shifting economic policies, evolving immigration targets, and persistent affordability challenges. Stakeholders must prepare for a pivotal year where policy reforms, global economic conditions, and emerging development trends will make a lasting impact on real estate activity for the foreseeable future. 

Here are the trends and market drivers set to shape Canada’s housing market in 2025—and how developers and investors can adapt to stay ahead. 

1. Economic Factors Impacting BC’s Real Estate Market 

Economic uncertainty will remain a defining characteristic in 2025, with several market forces at play. Interest rates, while easing, are expected to stabilize rather than steeply decline, as seen this past year. Inflationary pressures and a weak Canadian dollar will continue driving up construction costs, complicating the feasibility of new developments. As a result, developers will need to factor in high delivery costs as they consider new multi-family projects. 

Reduced immigration targets will temper rental demand, especially in Metro Vancouver. Alberta may benefit from these dynamics as affordability and job growth in cities like Calgary and Edmonton attract a larger share of newcomers. 

2. Changing Immigration Targets and Demand for Multi-Family Housing  

Reduced federal immigration targets in 2025 are expected to have a direct impact on housing demand, particularly in key arrival cities like Vancouver, Toronto, and Montreal. Since many newcomers rent before transitioning into homeownership, the rental market will likely feel the effects first. 

However, Alberta’s relatively affordable housing market and growing job sectors in Calgary and Edmonton offer a compelling alternative for new arrivals. "Alberta's economic resilience and lower cost of living make it a magnet for both skilled workers and young families," says Garde MacDonald, Director of Advisory at MLA Canada. "We anticipate that these cities will remain attractive to a substantial share of Canada's new immigrants and inter-provincial migrants in 2025"  

3. Shifts in Buyer Behaviour 

Affordability will remain front and centre for homebuyers in 2025. Rising construction costs and limited resale inventory will push many buyers toward presale properties with extended deposit structures. Investors, however, are expected to remain cautious, as presale homes still command a premium over resale properties. 

First-time homebuyers will likely explore government-backed incentives such as 30-year amortizations and reduced down payment programs. While these measures offer flexibility, they aren’t expected to drive substantial market activity alone, especially with first-time homebuyers that have been content to watch the market unfold over the past year. 

4. Affordability Challenges and the Spring Market Outlook 

Dropping interest rates will slightly ease affordability, but high home prices and the rising costs of delivering new housing will remain significant barriers to bringing more supply online. Developers must continue balancing construction budgets against shifting market dynamics to determine viable project timelines. 

Fixed mortgage rates are unlikely to decrease much further given the trajectory of the bond market and monetary policies from the Bank of Canada and U.S. Federal Reserve. This means homebuyers may need to adjust expectations around affordability, even as borrowing conditions improve moderately. 

Historically, the spring market has been the busiest time for presales. However, interest rates and borrowing costs are more directly tied to the resale market, as presale buyers typically secure mortgages closer to completion. "For the presale market to gain traction, we first need to see price appreciation in the resale market," explains MacDonald. "Without meaningful (5%+) gains there, the spring outlook for presales remains tempered." 

5. Neighbourhoods and Regions Poised for Growth 

Several regions across BC and Alberta are expected to experience notable growth in 2025 due to a combination of economic diversification, infrastructure development, and housing affordability: 

• Fraser Valley: Cities like Surrey, Langley, and Abbotsford remain key targets for buyers seeking affordability.
• Okanagan: Kelowna’s stricter short-term rental rules are likely to continue to dampen investor interest.
• Calgary and Edmonton: Calgary’s robust economy, supported by tech and clean energy sectors, positions it for continued growth. Similarly, Edmonton’s steady job creation and relatively affordable home prices make it a strong contender for both families and investors, especially in contrast with Calgary. 

6. Emerging Development Trends 

Developers should expect increased activity in key project categories, driven by market demand and government incentives: 

• Rental Projects: Thanks to federal and provincial incentives such as CMHC financing and BCBuilds programs, developers are leaning into purpose-built rentals to address long-term housing shortages.
• Small-Scale Projects: Developments under 120 units may outperform due to reduced risk, faster timelines, and lower initial investment requirements. These boutique-style projects often offer unique value propositions, attracting buyers looking for something distinct from large-scale communities.
• High-Density Projects: Transit-oriented developments (TODs) near major SkyTrain expansions in Metro Vancouver remain a focal point for developers. With the Surrey-Langley SkyTrain extension scheduled to complete in 2029, and the Broadway Subway looking to come online in 2027, expect new mixed-use communities that integrate residential, retail, and recreational spaces across the region. 

7. Regulatory and Policy Changes 

Regulatory reforms are set to reshape Canada’s real estate landscape in 2025, driven by federal, provincial, and municipal initiatives aimed at improving housing affordability and supply. Key changes include: 

• Faster Permitting Processes: Municipalities across BC have committed to reducing project lead times through streamlined permitting systems, though implementation remains uneven.
• Increased Development Charges: Metro Vancouver Development Cost Charges (DCCs) will rise in January 2025, potentially delaying projects as developers reassess budgets.
• Federal Housing Policy Shifts: With a federal election taking shape for 2025, housing and affordability will be a key factor in campaign platforms. 

“Unfortunately, there is no silver bullet or one lever that can be pulled to drastically change the market we have today,” notes MacDonald. “It will have to occur through industry lobbying and cooperation across multiple stakeholder groups.” 

8. Impact of Rezoning Initiatives on Multi-Family Supply 

Faster rezoning processes will increase the pace at which new housing supply can come online, offering hope for addressing long-standing shortages. However, the high cost of delivery—including land acquisition and construction expenses—continues to be a major barrier for developers. 

Rezoning and approval timelines are only one piece of the puzzle. For significant market impact, municipal governments must pair streamlined processes with financial incentives such as tax breaks, reduced development fees, and density bonuses. 
 
"Blanket and/or expedited rezoning alone won't resolve the housing crisis," explains MacDonald. "Without meaningful tax and cost reductions as well as policy alignment across all levels of government, unlocking new supply will remain a challenge." 

9. U.S. and Global Economic Policies 

Global economic policies, especially in the U.S., will heavily influence Canadian real estate in 2025. The recent change in U.S. presidential leadership introduces an element of uncertainty, as any policy shifts could impact trade relations, interest rates, and overall economic stability. Historically, U.S. economic strength has benefited Canada through increased foreign investment and a boost to export-driven industries. 

"A stronger U.S. economy and a robust U.S. dollar—paired with a weaker Canadian dollar—could attract more foreign investment into Canadian real estate," explains MacDonald.  

Additionally, any adjustments to U.S. Federal Reserve interest rates could influence Canadian borrowing costs, affecting both developers and buyers. With the U.S. economy currently outperforming Canada’s, developers should anticipate potential shifts in investment flows and adjust their strategies accordingly. 

10. Presale Marketing Trends 

Presale marketing strategies will continue evolving in 2025, with a focus on personalized and data-driven campaigns. Key trends include: 

• Data-Driven Campaigns: Developers are increasingly leveraging AI-powered analytics to refine targeting and tailor marketing messages. Predictive data models will help identify the most promising buyer segments and guide marketing spend.
• Storytelling-Focused Branding: With heightened competition, real estate marketing must go beyond features and amenities. Successful campaigns will emphasize lifestyle benefits, community appeal, and long-term investment potential.
• Influencer and Realtor Collaborations: Strategic partnerships with realtors and influencers will boost project visibility and credibility, particularly for first-time homebuyers and younger audiences drawn to digital platforms.
• Boutique Project Differentiation: Smaller, boutique developments offering unique living experiences will stand out in a market saturated with large-scale projects. Developers should emphasize exclusivity, design innovation, and prime locations to capture buyer interest. 

Looking Ahead: What’s Next for 2025? 

Canada’s real estate market in 2025 will be shaped by complex economic dynamics, shifting policies, and evolving buyer preferences. Developers must stay adaptable, leveraging market insights and policy updates to navigate the year’s challenges and opportunities. 

For a deeper dive into 2025’s emerging trends, be sure to explore the MLA Intel 2025 Report. This in-depth resource offers expert forecasts, key market data, and actionable recommendations to help real estate professionals thrive in a rapidly changing market. 

Stay ahead—and be ready to seize the opportunities that 2025 has in store.