Real Estate Market
National average home prices expected to Increase by 5% in 2025: Re/Max
Canada’s real estate market is expected to see rising prices in 2025, driven by growing demand and persistently limited inventory.
According to Re/Max Canada’s 2025 Housing Market Outlook Report, interest rate cuts and increased consumer confidence are likely to boost sales activity across the country. However, this combination of heightened demand and constrained supply is projected to push the national average residential sale price up by 5 per cent.
“While affordability challenges persist, the sequential interest rate cuts and changes to the mortgage stress test are a much-needed reprieve for those looking to get into the market,” says Christopher Alexander, president of Re/Max Canada.
The report, which surveyed 37 regions across Canada, also predicts sales activity will increase in 33 of those regions, with some areas anticipating growth of up to 25 per cent.
Re/Max agents across the country noted that first-time homebuyers—highlighted as the primary drivers of market activity in 81 per cent of surveyed regions—are poised to benefit most from these conditions.
Shifts in market dynamics and consumer confidence
Canadian consumer sentiment about the housing market remains cautiously optimistic. A Leger survey commissioned by Re/Max revealed that 36 per cent of Canadians expect housing market conditions to improve in 2025, while 73 per cent continue to believe homeownership is still the best investment they can make.
Unsurprisingly, affordability challenges remain top of mind. Nearly half of Canadians believe homeownership is attainable, while 40 per cent are open to relocating to new neighbourhoods to address rising costs. Additionally, the survey found an increasing interest in climate-resilient housing, with 47 per cent of respondents prioritizing properties less likely to be impacted by climate change—a 14 per cent increase from 2024.
Regional market insights: A seller’s market on the horizon
The report projects that 44 per cent of Canadian housing markets will shift to favour sellers in 2025. This trend will be especially pronounced in Western Canada, where residential prices are expected to rise by three to 10 per cent. For example:
Edmonton: Prices are anticipated to climb by 10 per cent, where Re/Max expects an influx of homebuyers from Calgary who’ve been priced out and looking to Edmonton for an affordable way to enter or invest in the housing market.
Greater Vancouver Area: A projected price increase of 7 per cent aligns with expected sales growth of up to 20 per cent.
Ontario, the country’s largest housing market, is also forecasted to experience price increases across the province, ranging from 0.1 per cent in Toronto to 10 per cent in Simcoe County.
Toronto and other urban centers such as Mississauga and Kitchener-Waterloo are expected to see balanced market conditions, while regions like Sudbury and York Region are likely to favour sellers.
In Atlantic Canada, prices are predicted to rise in every surveyed market, with notable increases of 8 per cent in Truro & Colchester, Nova Scotia and St. John’s, Nfld.
Key trends for 2025: Inventory, buyer demographics and affordability
Re/Max brokers and agents identified first-time homebuyers, move-up buyers and downsizing retirees as the leading demographic groups shaping the market in 2025. Demand for smaller, affordable properties such as townhomes and bungalows is expected to dominate, while move-up buyers are looking for larger homes.
Affordability and inventory will continue to pose challenges across many regions, particularly in highly competitive markets like Toronto and Vancouver.
“The current environment is more encouraging than it has been in the past few years, especially for first-time homebuyers,” Alexander notes. “However, a boost in sales, coupled with limited inventory, almost always leads to rising prices, which is the trend we’re expecting to see materialize in virtually all Canadian housing markets.”
Buying a home? Here's everything you need to know about Quebec's 'welcome' tax
Anyone who has bought a home in Quebec knows the rollercoaster high of making that big, life-changing purchase – and the sudden crash that occurs when the welcome tax bill comes in the mail, alongside its 30-day payment deadline.
The "welcome" tax, officially known as the property or real estate transfer tax, can range from a few thousand to tens of thousands of dollars, depending on how much the home was bought for.
"When any property title is changing hands, the province is taxing that transaction," explains Dr. Brian Wenzel, an associate professor in accounting at McGill University's Desautels Faculty of Management.
It's a municipal-level payment that was provincially established in 1976 – an efficient way for cities to make money without having to pass by higher channels.
The nickname, "welcome" tax, or "la taxe de bienvenue," comes from then-Quebec Liberal (PLQ) Minister Jean Bienvenue, who was the one who tabled the bill recommending its introduction.
Back then, according to the Quebec Municipal Affairs Ministry, the goal was to allow municipalities to "increase their tax base and become self-financing."
In 2022, the Quebec Municipal Affairs Ministry says the province's cities amassed $1.4 billion from property transfer taxes, representing "a major source of revenue for the municipalities."
The City of Montreal alone received more than $410 million from welcome taxes that year.
In 2023, the city made $286 million and in 2024, officials expect yields of more than $324 million from property transfer taxes.
For 2025, Montreal is estimating gains of more than $314 million.
"It's a revenue raiser. It sounds bad, like the government wants more money, but it's a different base of raising revenue, and that's the point of it," Wenzel tells CTV News. "It's kind of diversifying the finance system of the government. So, while it sucks when you have to pay it, and I've had to do that, I understand the point of [it is] just to broaden the base of taxation."
When asked how the money raised is reinvested, City of Montreal officials would only say, "the money from transfer duties is used to finance all city services."
The Quebec Municipal Affairs Ministry clarifies that this could include the maintenance and construction of infrastructure, such as the water supply system, roads, parks and other municipal services.
"All the money just goes into the general funds pot at the City of Montreal that allows them to perhaps not tax property elsewhere as high," Wenzel said.
He notes that with interest rates dropping, experts believe the real estate market could soon boom -- resulting in more money for the cities.
"You could lower fees and other taxes elsewhere if you have this windfall of revenue coming in, in theory," he muses.
Calculating the tax
Wenzel explains that the welcome tax calculation is broken up into several brackets.
The first three brackets are fixed by provincial law, and municipalities are free to establish additional tax rates as long as they do not exceed three per cent.
Montreal and Quebec City have exceptions to this rule.
As of 2024, the rates are as follows:
0.5 per cent for the amount paid up to $58,900;
One per cent for the amount paid between $58,900 and $294,600;
1.5 per cent for any amounts exceeding $294,600.
Additionally, the City of Montreal charges:
Two per cent from $552,300 to $1,104,700;
2.5 per cent from $1,104,700 to $2,136,500;
3.5 per cent from $2,136,500 to $3,113,000;
Four per cent for the amount paid exceeding $3,113,000.
That means that for a $700,000 home:
The first $58,900 multiplied by 0.5 per cent is $294.50
The following $235,700 multiplied by one per cent is $2,357
The next $57,700 multiplied by 1.5 per cent is $3,865.50
The $147,700 remaining multiplied by two per cent is $2,954
Therefore, the total welcome tax amount would be $9,471.
For a million-dollar property, that number goes up to just over $15,000 in cities like Montreal and Laval and more than $19,000 in Longueuil on the South Shore.
Here’s what Montrealers will be paying more for in 2025
Consumer price increases are slowing, but Montrealers will still feel the pinch of inflation in several different areas in 2025 — including at the grocery store and restaurants, and perhaps on their next flight. Bus and métro rates aren’t going up, but drivers will feel the hit as Montreal hikes vehicle registration fees to fund public transit. And electricity rates will be adjusted upward as of April 1.
On the bright side, Quebec pension payments are going up by 2.6 per cent and several employers plan to raise wages more quickly than the expected inflation rate. For those in the market to buy a house, the Bank of Canada reduced its policy rate repeatedly last year. The string of cuts are expected to spur home sales, but also increase the costs of homes. Inflation and borrowing Quebec’s annual inflation rate moderated to 1.6 per cent in October, compared with 4.2 per cent a year earlier, Quebec’s Finance Ministry reported, so inflationary pressures have reduced considerably. Most experts are predicting the inflation rate will decrease to two per cent in 2025 in Quebec and Canada. The Bank of Canada lowered its key interest rate by half a percentage point in December, but signalled a slower pace of rate cuts moving forward. The decision marked the fifth consecutive reduction since June and brings the central bank’s key rate down to 3.25 per cent. Forecasters were predicting the large cut after the November labour force survey showed the unemployment rate rose to 6.8 per cent. The Bank of Canada dropped its policy rate by 50 basis points in late October. Analysts were predicting rates would fall to 2.75 by mid-2025, potentially spurring an uptick in house sales.
Overall food prices are expected to climb by between three per cent and five per cent next year, according to the Canada’s Food Price Report, a document produced annually by Dalhousie University, the University of Guelph, the University of Saskatchewan and the University of British Columbia.
A Canadian family of four can expect to spend $16,833.67 on food in 2025, a more than $800 increase. Some food categories are expected to rise faster than others. Meat prices could rise four to six per cent in 2025, due in part to record high beef prices. Years of drought in the West mean cattle herds have been shrinking, driving up prices. Canada’s total cattle herd was the smallest it’s been since 1987, with an even more dramatic decline in the U.S. Higher feed costs and inflation have also contributed. The price of vegetables is expected to rise between three and five per cent next year. The Canadian dollar has been on the decline compared with the U.S. dollar, which makes imported foods more expensive, and this is likely to continue. Restaurant prices are expected to rise three to five per cent, as owners grapple with higher insurance and labour costs as well as interest rates. Bakery prices are set to rise two to four per cent, as are dairy prices. Vehicle registration Registration tax on passenger vehicles in the Greater Montreal area will increase from $59 to $150 this year to better fund public transit, the Communauté métropolitaine de Montréal (CMM) announced last May. The change comes as the Greater Montreal area grapples with a public transit funding deficit that the city of Montreal recently projected will worsen over the next few years amid rising costs. Flying with Air Canada Air Canada plans to bar carry-on bags and impose a seat selection fee for its lowest-fare customers, mirroring discount carrier tactics. Starting Jan. 3, basic fare passengers on trips within North America and to sun destinations will have to check duffel bags, rolling suitcases and large backpacks for a fee — $35 for the first, $50 for the second. The country’s largest airline said that as of Jan. 21, lower-tier customers will have to pay if they want to change the seat assigned to them at check-in. Municipal taxes
The Montreal budget, presented in late November, proposes an average property tax bill of $4,995 for homeowners. A 2.2 per cent increase in taxes means the average single-family home in the city, now valued at roughly $720,000, would see a tax rise of about $135. Increases by borough for residential properties range from 0.2 per cent in Ville-Marie to 3.4 per cent for L’Île-Bizard—Ste-Geneviève and 4.6 per cent in Pierrefonds-Roxboro. Less money for older adults who don’t retire As of Jan. 1, Quebec is increasing — to 65 from 60 — the age of eligibility for a tax credit for working later in life, a decision that is expected to save Quebec $877 million in spending over five years but cost 194,683 Quebecers about $973 a year in credits. The credit was created in 2011 with the intention of closing the gap with other provinces that had similar credits for workers, Finance Minister Eric Girard explained in November, saying the gap has now all but closed. Quebecers are also retiring later in life, making the incentive unnecessary, he said. The average retirement age in 2011 was 61.3. Today, it is 64.7 years.
Quebec pensions Several Quebec pensions will increase by 2.6 per cent starting in January, Retraite Québec announced in November. The average retirement pension paid at age 65, which is currently $682 per month, will increase to $700 per month. The average retirement pension paid at age 72, which is currently $1,083, will increase to $1,111 per month in 2025. And those who claim their retirement pension from the age of 60 will see it increase from an average of $457 per month to $469. Pensions paid by social security are indexed in January each year, according to the rate determined using the consumer price index. Home prices After three consecutive years of November sales declines, the number of homes sold in the Montreal area rose 47 per cent last November compared with a year ago. The Quebec Professional Association of Real Estate Brokers said 3,897 homes changed hands in the region in November 2024, up from 2,651 in November 2023. Meanwhile, the median price for all housing types in the region was up year-over-year, led by an 11.2 per cent increase in the price of a single-family home to $600,000, followed by a 7.6 per cent rise for condominiums to $425,000 and a 5.3 per cent gain for plexes to $770,000.
The price of a new home in Quebec is expected to rise by seven per cent in 2025 over the previous year, to an average of $557,595, the Canadian Real Estate Association (CREA) predicted in the fall. Lower interest rates are expected to spur buyers who had been been holding off to jump into the market. The CREA was forecasting sales to remain in a holding pattern until the spring, when a sharper rebound is expected. Quebec’s seven per cent increase is above the national average of 4.4 forecast for 2025, and far above British Columbia’s expected rise in prices (1.3 per cent), where the average house price is projected at $991,360 or Ontario’s (2.4 per cent), where the average house price is expected to rise to $877,546. Sales activity is expected to increase by 4.7 per cent in Quebec, below the national average of 6.6 per cent. Tax brackets Tax bracket thresholds are going up by 2.85 per cent next year, as is the amount at which citizens start to pay income tax. This means a bigger share of every Quebec taxpayer’s income will be taxed at a lower rate, resulting in savings of hundreds of dollars for some wage earners. As of Jan. 1, the basic personal amount that is exempted from taxation in Quebec will increase to $18,571 from $18,056.
What’s more, the maximum threshold for the first taxable income bracket — taxed at 14 per cent — will rise to $53,255 from $51,780. Salary increases Quebec employers plan to grant salary increases of 3.3 per cent next year across all occupations, according to a forecast released this fall by the Ordre des conseillers en ressources humaines agréés. That is half a percentage point less than what employers granted in 2024 (3.7 per cent, according to respondents to Statistics Canada), but is half a percentage point higher than the average before the COVID-19 pandemic.
Montreal home sales surge 47 per cent in November
Royal LePage forecasts home prices in Greater Montreal will rise by 6.5% in 2025 and 11% in Quebec City.
Montreal’s real-estate market is experiencing a surge, with experts predicting further price increases in 2025.
Residential sales jumped 47 per cent in November compared with the same month last year, marking the second-largest increase for November since 2000, according to the Quebec Professional Association of Real Estate Brokers (QPAREB). The rise follows October’s home sales rising around 44 per cent compared with the same month last year.
The association attributed the boost to strong performances in plexes, which rose 61 per cent, single-family homes, up 49 per cent, and condominiums, seeing a 41-per-cent rise.
Despite only a modest increase in property listings, demand continues to outstrip supply, pushing prices higher.
Looking ahead, Royal LePage forecasts home prices across Quebec to rise in 2025 by seven per cent, with Greater Montreal projected to see a 6.5-per-cent increase and Quebec City an 11-per-cent jump.
Royal LePage, which provides services to around 20,000 real-estate professionals across Canada, said the expected growth is due to ongoing demand, limited inventory and overall economic resilience.
This forecast follows a year of four consecutive interest-rate cuts by the Bank of Canada, which have made it easier for buyers to afford homes. The market also faces increasing geopolitical uncertainty, with U.S. president-elect Donald Trump threatening a trade war.
“While Quebec continues to demonstrate great economic resilience, trade issues with the U.S. and the 2025 Canadian federal election could introduce some volatility,” said Dominic St-Pierre, executive vice-president of Royal LePage.
“Talk of possible tariff increases by the new Trump administration raises questions, but we believe that hasty action would be unlikely, given the economic interdependence between the two countries,” he said.