While Canada’s housing market is on a recovery path, several key risks could impact the outlook in 2025.

1. U.S. Tariff Threats

Economic disruption from trade tensions could lead to job losses, reducing buyer confidence and demand. Export-dependent sectors like manufacturing could be hit hardest.

2. Mortgage Renewal Payment Shock

Many homeowners who locked in low rates in 2020-2021 will face significant payment increases when renewing. Even with lower interest rates in 2025, financing costs will still be higher than before. This could force some owners to sell, increasing inventory and slowing price growth.

3. Toronto Condo Market Under Pressure

The Toronto condo market faces a surge in supply, with new completions and weaker investor demand weighing on prices. Lower interest rates may help in the long run, but in the near term, prices could soften, especially in highly saturated areas.

What to Watch:

• How deep will interest rate cuts go?
• Will the Bank of Canada step in if the economy slows?
• Will global trade tensions impact housing demand?

The Bottom Line: The market is recovering, but economic risks remain. Buyers and investors should stay cautious and informed.