Canada faces housing challenges as interest rates shift in 2025

In 2025, Canada faces a housing crisis, particularly in Ontario, where high taxes and red tape hinder new developments. In contrast, British Columbia and Alberta have seen growth in housing construction, leading to an outflow of residents from Ontario. Home sales are increasing as the Bank of Canada cuts interest rates, but many homeowners will renew mortgages at significantly higher rates. This situation may worsen housing affordability, which remains a concern amid tight supply. While interest rate cuts have spurred some market activity, fixed mortgage rates remain high. Young households, previously unable to buy homes, may drive demand as financing conditions improve, but the overall housing outlook remains uncertain.