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The Canadian housing market is anticipated to experience a rebound in both sales and prices throughout 2025. This positive outlook is largely attributed to the Bank of Canada's recent interest rate cuts, which have reduced the benchmark rate to 3%, making borrowing more affordable for potential homebuyers. The Toronto Regional Real Estate Board (TRREB) has reported a 10% increase in home sales in the Greater Toronto Area in January, following a significant decline in the previous month. Additionally, new listings have risen by 26% from December and by 48.6% compared to the same period last year. TRREB forecasts a 12.4% rise in home sales and a 2.6% increase in the average selling price for 2025 compared to 2024.

However, the market's recovery faces potential challenges due to ongoing trade tensions with the United States. The U.S. has proposed tariffs of up to 25% on Canadian exports, which could have significant economic repercussions. The Bank of Canada has expressed concerns that such trade conflicts may lead to weaker growth and higher inflation, potentially impacting consumer confidence and the housing market's momentum. Businesses are also cautious, with some hesitating to invest due to uncertainties surrounding U.S. trade policies.

Despite these uncertainties, the housing market has shown resilience. In November 2024, the Greater Toronto Area experienced its fourth consecutive monthly increase in home sales, reaching the highest prices seen in a year. This trend was supported by lower borrowing costs and a renewed interest from buyers. While the outlook for 2025 remains optimistic, with expected growth in sales and modest price increases, stakeholders are advised to remain vigilant. The interplay between favorable borrowing conditions and external economic factors, such as international trade dynamics, will play a crucial role in shaping the housing market's trajectory in the coming months.

Read the full article on: CTV NEWS