Spring ‘surge’ in real estate sales expected in Ontario and across Canada

Home buyers take note — the real estate market could see a surge of buyers in spring 2025 in Canada.

It’s been a few years since the Canadian real estate market experienced a typical spring market, with sales peaking between March and June and inventory rising to meet demand but that may change in 2025, according to a new study from real estate brokerage Zoocasa.

“Next year, Canadians can anticipate a lively spring market kicking off as early as March,” said  Lauren Haw, Zoocasa broker of record and industry relations officer. “With interest rates stabilizing and strong pent-up demand among buyers, we’re likely to see a return to a more traditional spring surge in real estate activity.”

A recent Re/Max report also suggested Canada’s national average home price will likely increase by five per cent in 2025 with some cities seeing bigger jumps than others.

Four interest rate cuts by the Bank of Canada this summer and fall—most recently lowering the overnight lending rate to 3.75 per cent—could motivate home buyers, the Zoocasa report indicated.

Since a peak in 2021, spring home sales have declined.

The Canadian Real Estate Association found national home sales in May 2024 were the lowest recorded for the month since 2021. On the other hand, national new listings in May 2024 were near the highs of 2021 and 2022, offering buyers more choices and reduced competition.

In spring 2025, buyers will likely face increased competition, as many sideline buyers are expected to return. At the same time, heightened buyer activity could encourage more sellers to list their properties, potentially boosting new listings, the report stated.

Haw suggested that there will be rising demand from buyers returning to the market and the potential for increased supply from homeowners renewing their mortgages.

“There will be a lot of buyers coming off the sidelines, driving demand higher, while a wave of mortgage renewals is likely to push some homeowners to downsize, adding to supply,” Haw said. “Although rates have recently come down, they remain significantly above the low levels of 2020 and 2021, when many of these mortgages were originally secured.”

In a recent Zoocasa survey, 42.3 per cent of respondents said that rising home prices were their primary concern regarding home buying, followed by interest rates (25.6 per cent) and economic uncertainty (14.9 per cent).

But average home prices in Ontario have been mostly flat in 2024, while average condo prices in many markets have experienced year-over-year decreases, the report noted.

This may motivate first-time buyers as there will be concerns about rising prices.

See the full report here.

Lead photo: Curtis Adams