“Is now a good time to buy a house in Canada?” This is one of the most frequently searched questions in Canadian real estate — and with good reason. Homeownership remains a major milestone, but with prices climbing, interest rates fluctuating, and the economy evolving, knowing when to buy is critical to getting the most value.

Whether you’re a first-time homebuyer, a newcomer to Canada, or a seasoned investor looking to expand your portfolio, the answer depends on several key factors: market conditions, personal finances, mortgage rates, and regional differences. Let’s take a deep dive into what 2025 has in store.

1. The Current Canadian Housing Market Overview (2025)

As of mid-2025, the Canadian housing market is showing signs of stabilization. After the rapid price growth in 2020–2022 and the correction in 2023–2024, prices have begun to level off.

The national average home price, according to the Canadian Real Estate Association (CREA), sits around $711,000, reflecting a modest year-over-year increase of about 3%. This figure, however, varies dramatically by region — with Vancouver and Toronto averaging over $1 million and smaller urban centers remaining below $500,000.

Inventory has also improved. Many cities are now seeing a balanced market, where supply and demand are roughly in line. This gives buyers more choice and reduces the pressure to bid over asking.

2. Interest Rates in 2025: A Break for Borrowers?

One of the most important indicators of housing affordability is the Bank of Canada’s policy interest rate. After peaking above 5% in 2023 to combat inflation, the rate has now decreased to 4.25%, with further small cuts expected later in 2025.

This drop in interest rates directly affects mortgage affordability. A 1% reduction in rates can save homeowners thousands of dollars over the life of a loan. Fixed and variable mortgage rates offered by banks are also easing, hovering between 4.3% and 5.1% depending on term length and credit profile.

For buyers waiting for mortgage relief, 2025 is shaping up to be more favourable than the past two years, though still not as cheap as the sub-2% rates of 2020–2021.

3. Regional Variations: Where You Buy Matters Most

Not all Canadian housing markets move in unison. While the national picture is one of stability, there are local markets where prices are falling, and others where they’re rising fast again.

Markets Showing Good Buying Conditions:

• Calgary: Lower home prices, strong job growth, and migration from other provinces are keeping this market hot for buyers.

• Edmonton: Consistently affordable, with detached homes averaging under $500K.

• St. Catharines & Windsor: Attracting attention for their affordability in Ontario.

Markets to Watch Closely:

• Toronto & Vancouver: Price rebounds are underway, and competition may grow again as interest rates drop.

• Ottawa: Stable public sector employment and moderate price appreciation make it balanced.

4. Are Prices Going Up or Down in 2025?

The consensus among economists is that home prices will gradually increase in the second half of 2025, though not as dramatically as during the COVID-era boom.

CMHC (Canada Mortgage and Housing Corporation) forecasts national price growth between 2.5% and 4.5%, depending on the province. Factors contributing to upward pressure include:

• Strong immigration targets (nearly 500,000 newcomers in 2025)

• Limited new housing construction

• Lower mortgage rates encouraging demand

That said, buyers in overpriced markets may still find deals, particularly in older properties or areas farther from city centers.

5. Should First-Time Buyers Jump In Now?

First-time buyers face a tough decision. The longer you wait, the more you might save if a local market dips. But at the same time, falling interest rates and rising demand could push prices back up.

If you’re financially ready — meaning you have:

• A steady income

• A down payment of at least 5%–20%

• Mortgage pre-approval

— then now could be an excellent time to buy, especially before the fall market heats up and competition grows.

Also, consider programs designed for first-time buyers, such as:

• First-Time Home Buyer Incentive

• Home Buyers’ Plan (RRSP withdrawal)

• Tax-Free First Home Savings Account (FHSA)

6. Investor Outlook: Is Canadian Real Estate Still a Safe Bet?

Despite tighter regulations and higher borrowing costs, real estate continues to attract investors. Rental markets are booming in cities like Toronto, Montreal, and Halifax, driven by population growth and a lack of supply.

Cap rates remain compressed in big cities, but opportunities exist in:

• Purpose-built rentals

• Student housing

• Secondary suites in suburban homes

If your goal is long-term capital appreciation and rental cash flow, real estate remains one of Canada’s most resilient asset classes — particularly if purchased in the right market.

7. Risks to Consider Before Buying in 2025

No market is without risk. Buyers should be aware of:

• Potential for job losses if the economy slows further

• Price stagnation in overbuilt condo markets

• Affordability ceilings, especially for young buyers with debt

• Regional economic shifts, such as declining industries

It’s essential to work with a knowledgeable Realtor and mortgage advisor to model out your risk profile and future affordability under different scenarios.

8. Buyer Strategies: How to Make a Smart Purchase in 2025

If you’ve decided to move forward with buying a home in 2025, here are some best practices:

• Get Pre-Approved First: Know what you can afford based on current rates and stress test rules.

• Time Your Move: Spring and fall are traditionally active markets, but summer and winter may offer better deals.

• Look Beyond the Big Cities: Affordability is better in secondary markets like Kingston, Guelph, Barrie, or Moncton.

• Negotiate: With more listings and balanced conditions, you have greater power to ask for price reductions, inclusions, or even conditions.

Conclusion: So, Is Now a Good Time to Buy a House in Canada?

In 2025, the answer is cautiously yes — but only if your personal finances and long-term goals align with current market realities. The Canadian housing market has cooled from its overheated past, interest rates are easing, and more inventory is giving buyers options.

If you’re financially ready, have stable employment, and plan to hold your property long-term, buying now could lock in value before prices rise again.

For others, especially speculative investors or stretched buyers, patience may be more prudent.

Final Thoughts

The real estate market is never one-size-fits-all. Whether it’s a good time to buy depends not just on national data, but your location, income, goals, and timing. In any case, 2025 is shaping up to be a year of opportunity over panic — especially for informed and strategic buyers.