What Buyers and Sellers Should Know as Market Forecasts Shift
Canada’s housing market is showing signs of strain, and the latest forecast from the Canadian Real Estate Association (CREA) confirms it. With home sales now projected to fall 3% in 2025, both buyers and sellers are facing a slower-than-expected recovery. Mortgage rates remain high, inventory is growing in key markets, and price corrections are beginning to take shape. For anyone watching real estate in Guelph, now is a good time to take stock of what’s happening and consider how to respond.
Sales Outlook Revised: What Changed?
CREA now expects just under 470,000 homes to sell across Canada in 2025, a notable shift from earlier projections that called for growth. Inflation remains above the Bank of Canada’s target, and with rate cuts on hold for now, borrowing costs continue to weigh heavily on demand. That’s causing many buyers to stay on the sidelines, waiting for a more favorable environment.
Although national home sales increased slightly in June, activity remains well below long-term trends. CREA also lowered its average home price forecast by about $10,000, now predicting a 1.7% decline year-over-year to around $677,000.
High Rates, Low Confidence
Fixed mortgage rates are tied closely to bond yields, which are still sitting above 3%. As long as yields stay elevated, mortgage costs will remain high. On top of that, Canada’s mortgage stress test requires buyers to qualify at two percentage points above their contract rate. That means even a small increase in interest rates can significantly reduce a buyer’s purchasing power.
This combination of high rates and reduced affordability is making many would-be buyers hesitant to enter the market.
Guelph Market in Context
Much of the national slowdown is being driven by major urban centers such as Toronto, where new condo sales have dropped by 69% and unsold inventory has reached a five-year supply. However, the effects are being felt in mid-sized markets like Guelph as well. Homes are spending more time on the market, and sellers are adjusting their pricing expectations.
At the same time, local demand hasn’t disappeared. Guelph continues to attract buyers due to its strong community, steady employment, and quality of life. The pace has slowed, but activity hasn’t stopped.
What’s Next?
Real estate is highly sensitive to interest rate changes. In past cycles, even small cuts from the Bank of Canada have helped re-energize the market. But with core inflation still above 2% and global trade tensions creating new uncertainty, rate relief may not come as quickly as some had hoped.
If you’re planning to buy, sell, or invest, the most important step is to approach the market with a clear plan. A well-informed strategy can make a significant difference in your results. I’m always available to help you navigate with confidence, no matter what the market is doing.

