Orangeville Real Estate Market 2025 Outlook

January is a great time to look ahead and make some predictions about what the new year will bring. I’m not one to make bold predictions about the real estate market but I would like to share my thoughts on what I can see today that might impact the market moving forward. As we begin 2025 the one word that I keep thinking about is Uncertainty. There are so many issues that we can see right now that will cause a lot of questions for the real estate market this year. The main areas that I have been focusing on are:

Interest Rates
Economy & Employment
Political Changes
Pent Up Demand
2020 Mortgage Renewals

Let’s look at each of these topics in a little more detail. 

Interest Rates

The consensus among economists is that the Bank of Canada will continue to lower interest rates in 2025. How much interest rates will come down is up for debate there are some that think that we will only see a modest 25 basis points adjustment, bringing the policy rate to 3.00% while others are predicting a more significant move of 125 basis points which would give us a 2.00% policy interest rate and many predictions in between. 

While many will tell you that lower interest rates will translate to higher home prices I think you need to take a step back and look at why interest rates are declining. Generally, the Bank of Canada will lower interest rates to increase economic activity when the economy is slow. Lower interest rates will help with affordability and will help with the burden of household debt when mortgages come up for renewal this year. I don’t know if these lower rates will support higher prices or more activity in the real estate market. 

The Economy

In general, the Canadian economy has seen a slowdown over the last 2 years. Overall many economists expect the Canadian economy to have low growth in 2025, with unemployment remaining near 7% nationally. In Ontario the unemployment rate is higher than the national average with unemployment, 7.4% in Ontario vs 6.8% nationally. With weakness in the economy and uncertainty about job stability people tend to be less interested in moving. 2025 could be another year of low sales volumes in real estate. 

Political Changes  

With the resignation of Justin Trudeau, there should be a federal election in Canada in 2025, and if you believe the current polls the Conservatives should win the election and form a new government. This will likely produce some changes to policies around housing in terms of government incentives or priorities for new construction. 

In addition, the Ontario government has declared an election for the end of February, which will mean a whole new set of promises and I expect housing affordability to be a hot issue in the provincial election. 

Beyond our borders, the new US government has been making noise about trade and tariffs between Canada and the US. Nothing is certain in this area but with all the noise from the US I would expect there to be some action on the horizon.

When the US provides some clarity on how they will be proceeding with the application of tariffs the various levels of Canadian government have discussed several retaliatory actions that are possible. This looming trade war adds to the uncertainty in the economy.

Pent-Up Demand

The term pent-up demand gets thrown around in real estate, especially after a couple of years of low sales activity. Life changes for people and there is a desire to move when life changes whether that is growing families that need more space empty nesters looking to downsize, or people looking to make a geographic change. With house prices and interest rates at current levels, many of the would-be home buyers are also sellers and we saw some of that interest in moving show up in the form of new listings in 2024. Many people would like to move but would only do so if they could sell for the value that wanted for their existing home. The majority of these listings that didn’t sell, mostly due to being overpriced, were a sign of that “demand” and there was an overall lack of motivation to make that move. 

2020 Mortgage Renewals

This will be something to watch more for the second half of the year and into 2026 but I think it will be interesting to see what happens as the 5-year mortgages that were taken out in 2020 at very low interest rates come up for renewal in 2025. I have seen it published that 1.2 million mortgages are coming up for renewal in 2025 across Canada, many of these will be mortgages near 2% renewing into a market with a variable rate in the 3.5% - 4.5% range. How many of these households can absorb the increased cost of home ownership and how many will become motivated sellers in the market? 

What to Expect in 2025

Generally, when there is uncertainty around employment and the economy people don’t like to make huge decisions about adding more debt to their household. I believe that there will be a large number of new listings coming to the market as we approach the spring but I do not think we will see a large number of transactions take place. 
As we move through the year and see what changes take place in the economy, with the government policies, and as the 2020 mortgages come up for renewal we might see a shift in motivations for home sellers and activity may pick up. I expect home prices to continue to be in the range that we have seen for most of the last two and a half years.