Justin Trudeau Resigns: What Does This Mean for the Canadian Housing Market in 2025?

Published By: , January 6, 2025

Good day and Happy New Year! I hope you had a fantastic holiday season and are ready to kick off 2025 with fresh opportunities. As we ease into the year, the biggest developing story dominating headlines is Prime Minister Justin Trudeau’s recent resignation. But before we dive into what this means for the Canadian housing market, let’s highlight some key developments shaping the landscape as we start the year.

2024 Recap: Key Trends in Hamilton-Burlington

The Hamilton-Burlington area saw moderate home price growth in 2024, offering a more stable foundation for homebuyers entering 2025. According to the Cornerstone Association of Realtors®, there were 10,086 transactions last year, a number nearly identical to 2023 but 27% below long-term trends. High interest rates and economic uncertainty resulted in slower sales during the spring, but as interest rates began to decrease, we saw a stronger push from buyers toward the end of the year.

Despite this increased activity, inventory levels remained elevated, helping to keep prices moderated. However, it’s worth noting that prices are still 9% higher than pre-pandemic levels in 2020.

Justin Trudeau Resigns: What’s Next?

Prime Minister Justin Trudeau’s surprise resignation marks a major political shift for Canada. Trudeau announced his decision to step down after months of mounting pressure from within the Liberal Party. While he will remain Prime Minister until a new leader is elected, this transition creates uncertainty in government policy, especially regarding housing.

With Parliament prorogued until March 24, we expect a temporary slowdown in new legislation, potentially delaying housing-related policies. Buyers and sellers will be closely watching the direction of the new leadership to gauge potential shifts in housing policy and economic plans.

2025 Market Outlook: Predictions and Trends

Despite the political shake-up, market experts remain optimistic about Canadian real estate in 2025. Ted Rechtshaffen, president at TriDelta Private Wealth, predicts a 10% year-over-year price increase driven by several key factors:

1. Pent-Up Demand: Many buyers sat on the sidelines in 2024 due to higher rates and uncertainty. Lower interest rates are now pulling them back into the market.
2. Lower Mortgage Rates: The Bank of Canada began cutting rates in late 2024, and more cuts are expected this year, easing affordability challenges.
3. Increased Immigration: While Canada has slightly reduced immigration targets, the demand for housing remains strong in urban centers like Toronto and Hamilton.
4. Higher Price Caps for Insured Mortgages: Expanded borrowing capacity enables buyers to qualify for higher-priced homes.
5. Rising Rents: Although rental prices stabilized slightly due to increased inventory and immigration slowdowns, many renters may transition to homeownership this year.

Spotlight on Hamilton: Growth and Investment Opportunities

Hamilton continues to be a city of growth and transformation. IKEA is moving forward with plans to build a new customer distribution center in the area, replacing its Mississauga facility. This $82 million investment, if approved, is expected to create jobs and bolster Hamilton’s economy.

Additionally, the provincial government approved the construction of a Homeless and Addiction Recovery Treatment (HART) Hub in Hamilton as part of a $378 million investment across Ontario. These developments highlight Hamilton’s growing importance as a hub for economic activity and social development.

What Does This Mean for Buyers, Sellers, and Investors?

For buyers:

• With more inventory expected this spring and lower mortgage rates, 2025 could be an ideal time to enter the market—especially for first-time buyers looking at condos.
• Condo prices are still moderated, presenting affordable options compared to detached homes.

For sellers:

• Expect more activity in the market, particularly as demand picks up through spring and summer.
• Freehold properties may continue to face tight inventory, providing an opportunity for competitive pricing.

For investors:

• With renters transitioning into homeownership, investors may need to focus on multi-unit properties or up-and-coming neighborhoods to see returns.
• Hamilton remains a prime area for growth due to economic development and infrastructure improvements.

Final Thoughts

While Justin Trudeau’s resignation introduces political uncertainty, the Canadian housing market’s fundamentals remain strong heading into 2025. Lower mortgage rates, increased housing inventory, and continued demand for affordable housing create opportunities for buyers and sellers alike. Keep an eye on government policies as the new leadership takes shape, but for now, the market appears poised for growth and stability.

Stay tuned for more updates as the year unfolds, and don’t hesitate to reach out if you have questions about buying, selling, or investing in real estate!