Review of the real estate market of 2024 and outlook for 2025

The year 2024 has finally brought us out of the real estate market slump that began in June 2022 with massive interest rate hikes, while managing to keep our attention on the edge of our seats. As the volume change chart shows, as soon as expectations of lower rates emerged, the market immediately demonstrated increased liquidity.

Surprisingly, however, when rates actually began to fall (in the summer of 2024), sales volumes fell back to the almost anemic levels of 2023. It wasn't until the third rate cut in September, followed by two consecutive 50bp cuts, that volumes and prices recovered significantly.

At the dawn of 2025, the tone has changed radically. Sales volumes, in many sectors, are now approaching the levels seen just before the pandemic, a time then considered a vigorous market. What's more, multiple offers are making a comeback in several sectors.

In its recently published forecasts, Royal LePage anticipates an increase of 6.5% for the current year. If the current momentum continues, supported by further rate cuts, it is not unlikely that most of this increase will materialize in the first half of the year. All indicators continue to point to a structural imbalance between supply and demand for residential real estate: the low rate of new housing starts, sustained immigration, the cost of financing and economic resilience are key factors.

The only fly in the ointment is the uncertainty surrounding trade relations with our American economic partner. While the possibility of new tariffs is a concern, their scope, duration and actual impact remain unknown variables. In the short term, however, this should not have a significant effect on the market, but it is something to keep a close eye on.