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Is 2025 a Good Time for Canadians to Buy or Sell Real Estate? What about Alberta Real Estate?

Writer's picture: StartritehomesStartritehomes

The Canadian real estate market is a dynamic and ever evolving landscape. It is influenced by numerous factors, including economic policies, international trade, and local market trends. As we enter 2025, questions surrounding whether it is a good time to buy or sell property in Canada have become more critical than ever. This analysis delves into the opportunities and risks for homebuyers, sellers, and real estate investors, with a special focus on Alberta’s housing market, the implications of U.S. tariffs, and broader market projections.


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Current Trends in Canadian Real Estate


The Canadian real estate market experienced a slowdown in 2023 and early 2024, driven by rising interest rates and declining affordability in major cities. However, 2025 has ushered in new opportunities, especially in regions like Alberta, where affordability remains attractive compared to provinces such as Ontario and British Columbia.


Key National Statistics for 2025:


  • Average Home Price: According to the Canadian Real Estate Association (CREA), the national average home price is hovering around $730,000, with some regional disparities.

  • Interest Rates: The Bank of Canada maintained a benchmark rate of 4.5% in early 2025, stabilizing borrowing costs.

  • Inventory Levels: Canada continues to face a housing supply shortage, with demand outpacing new construction in most provinces.


The Alberta Real Estate Market: A Unique Opportunity


Why Alberta is Attractive

Alberta stands out as a key market for buyers and investors in 2025 due to its relative affordability, strong economy, and growing population. With average home prices in Calgary and Edmonton around $490,000 and $410,000 respectively, Alberta remains significantly more affordable than markets like Toronto or Vancouver. Historically, these prices have shown steady but manageable growth, staying well below the peak prices seen in major metropolitan areas like Toronto, where averages often exceed $1 million.


Economic Factors:


  • Energy Sector Resilience: Alberta’s economy, heavily reliant on oil and gas, has rebounded as global energy demand grows. Increased oil prices, projected to remain above $85 per barrel, provide a robust economic foundation.

  • In-migration Trends: Alberta continues to attract interprovincial migrants seeking lower housing costs and a better quality of life.

  • Rental Market Growth: The rental vacancy rate in Calgary dropped to 2.5% in 2024, indicating strong demand for rental properties.


“Alberta’s housing market is well-positioned for growth in 2025, offering both affordability and investment potential, especially in its urban centers,” says James Hunter, a Calgary-based real estate analyst.


The Impact of U.S. Tariffs on Canadian Real Estate


Potential Impact of U.S. Tariffs on Oil and Gas

If the United States imposes tariffs on Canadian oil and gas starting February 1, 2025, Alberta's real estate market could face mixed consequences. Higher tariffs on these key exports could strain Alberta’s energy sector, potentially impacting job growth and slowing economic momentum. This, in turn, might dampen real estate demand in certain areas, particularly in regions heavily reliant on oil and gas employment. However, limited supply and sustained population growth may still provide a buffer for home values in Calgary and Edmonton. Investors should monitor these developments closely, as any prolonged impact on the energy sector could influence rental demand and long-term property appreciation rates.


Overview of U.S. Tariffs

The United States recently imposed new tariffs on Canadian exports in late 2024, including lumber and steel, two critical components of the real estate supply chain. These tariffs, ranging from 10% to 15%, are expected to increase construction costs across Canada, potentially driving up home prices and delaying new housing projects.


Key Impacts:

  1. Increased Building Costs:

    • Lumber prices surged by 8% in Q4 2024, with further increases projected in 2025.

    • Steel costs have risen by 12% due to tariffs, impacting commercial and residential construction.

  2. Reduced Housing Supply:

    • Developers may scale back projects due to higher costs, exacerbating Canada’s housing shortage.

  3. Regional Disparities:

    • Provinces reliant on new construction, such as Alberta, could see delayed projects, but existing home values may rise as demand shifts to resale properties.


“Tariffs on key materials will put upward pressure on home prices, particularly in regions with significant ongoing development. However, resilient markets like Alberta could still provide opportunities for investors,” explains Sarah Moore, an economist at RBC.


Should You Buy or Sell in 2025?


For Buyers:

  • Opportunities:

    • Alberta offers a chance to purchase affordable properties with strong long-term appreciation potential.

    • Smaller markets in Atlantic Canada, such as Moncton and Halifax, remain accessible and show steady growth.

  • Challenges:

    • Rising construction costs due to tariffs may inflate prices for new builds.

    • Limited housing supply in urban centers could lead to competitive bidding wars.


For Sellers:

  • Opportunities:

    • High demand in urban centers and mid-sized cities like Calgary and Ottawa creates favorable conditions for sellers.

    • Low inventory levels mean that well-maintained properties can fetch premium prices.

  • Challenges:

    • Sellers in regions heavily reliant on new construction may face slower sales due to rising buyer caution around affordability.


Real Estate Investments in 2025: What to Expect


Markets to Watch:

  1. Alberta:

    • Calgary and Edmonton are prime locations for rental property investments due to low vacancy rates and population growth.

    • Affordable housing prices provide a low entry point for first-time investors.

  2. Ontario:

    • While Toronto remains expensive, smaller cities like Hamilton and Kitchener are experiencing a surge in demand.

  3. Atlantic Canada:

    • The region continues to attract retirees and remote workers, making it a stable investment choice.


Markets to Avoid:

  1. Overheated Markets:

    • Vancouver and Toronto’s high prices and low yields make them less attractive for new investors.

  2. High-Tariff-Impact Regions:

    • Areas heavily reliant on new developments could face delayed projects and inflated costs.


Expert Projections for 2025


Housing Prices:

The CREA projects a 4-6% increase in national average home prices by the end of 2025, with Alberta expected to see above-average growth of 6-8% due to strong demand.

Interest Rates:

While rates are expected to remain stable, any shifts by the Bank of Canada could impact affordability and market dynamics.

Rental Market:

Rental demand is likely to increase, particularly in Alberta and Atlantic Canada, driven by population growth and affordability challenges in larger cities. For example, Alberta’s population grew by 3.7% in 2024, marking one of the highest growth rates among provinces, while Halifax saw a 4.2% rise in its metro population, fueled by interprovincial migration and remote work trends.


Projections for 2026


Looking ahead to 2026, Alberta’s real estate market is expected to remain a top performer in Canada. However, if U.S. tariffs on oil and gas exports imposed in February 2025 persist, the province’s energy sector may face challenges that could moderate real estate growth. While Alberta’s affordability and population growth will still provide an edge compared to overheated markets like Vancouver and Toronto, these tariffs could strain job growth and economic stability. Home prices in Calgary and Edmonton are projected to see a 3-5% increase, slightly lower than initial projections, as the energy sector adapts to these external pressures. With continued population growth and economic stability driven by the energy sector, home prices in Calgary and Edmonton could see an additional 5-7% increase. However, construction delays and high material costs may temper supply growth, sustaining competitive conditions for buyers.


As Sarah Moore from RBC highlights, “Alberta’s affordable entry points and rental potential will keep it a magnet for investors, even as national markets face affordability challenges.” Meanwhile, urban centers like Vancouver and Toronto may experience moderate price corrections, opening limited windows for buyers. Investors should carefully consider regions with strong job growth and rental demand, as these will yield the best returns.


Federal and Provincial Incentives for Buyers and Sellers


Both federal and provincial governments have introduced various programs to offset housing costs for buyers and sellers. For instance, Alberta offers a First-Time Home Buyer Tax Credit, providing financial relief for new homeowners. On a federal level, the government’s initiative to sell or lease federal land for affordable housing is gaining traction. This program enables builders to access prime locations at reduced costs to develop low-income housing. In Alberta, cities like Edmonton and Calgary have designated federal land available for lease under this program, creating new opportunities for developers to address housing shortages. This initiative is particularly beneficial in mitigating the impact of rising construction costs driven by U.S. tariffs. Builders and interested parties can learn more about available locations and application processes through the Government of Canada’s website at Canada.ca Affordable Housing Initiative.


Deciding whether to buy, sell, or invest in Canadian real estate in 2025 depends on individual circumstances and market conditions. Alberta’s affordable housing market and strong economic fundamentals make it a standout choice for buyers and investors. However, the impact of U.S. tariffs on construction costs, housing supply, and potential tariffs on oil and gas exports starting February 2025 necessitates careful consideration. These developments could affect Alberta’s energy sector, influencing job growth and long-term property appreciation rates.


Find top-rated real estate professionals in Alberta using Pro Search and make careful and informed decisions with the help of the best professionals in Alberta real estate.

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