What we can see in Real Estate 2025

What Changes in 2024 will impact 2025?

3 New mortgage rules/Changes will increase buyers into the market:

1. Effective December 15, 2024, first-time buyers and new builds can amortize up to 30 years, which will allow for more buying power.

2. The federal government increased the cap on insured mortgages to $1.5 million from $1 million, which will allow more people to buy a house with a down payment below 20 percent.

3. The Bank of Canada had 5 consecutive rate reductions ending the year at 3.25%. Forecasters predict a few more cuts in 2025. This too will allow for more buying power and get buyers out of hibernation.

   
   

Back on June 25, 2024, changes were made to capital gains tax on properties that are not your principal residence. Investments and secondary properties when sold will now be taxed 50% on their capital gains up to $250,000. Beyond $250,000, when sold, are taxed at 66.67% on any additional capital gains. In my opinion, this will decrease the number of homes going to market. Investors may hold on to their properties longer in hopes of a new government making amendments to this rule. This will decrease the number of homes coming to market.

Ontario’s Housing Minister had a plan to build 1.5 million homes by 2031. We are not on target to meet this goal. One reason or excuse (you decide) for this setback has been blamed on high interest rates, which resulted in high carrying costs for builders. Therefore, we still have and will continue to have, a supply and demand issue.

Based on all of this, I predict a busy early spring market. If you are a risk taker and looking to move, I’d suggest buying before selling, although there are always risks with this strategy, but it can be profitable if done correctly. I can guide you safely through this process.

Let’s see this time next year if I was correct!