Justin Trudeau's Resignation and the Future of the Canadian Real Estate Market for 2025
- caitlinleetolley
- Jan 7
- 3 min read
In a decision that surprised no one, Prime Minister Justin Trudeau announced his plan to step down today, officially signaling the start of a new political era for Canadians. While the move has bought the Liberal party has a 3 month timeframe to select a new leader, Parliament will reconvene on March 24th, with the Conservative party, led by Pierre Poilievre, enjoying a commanding lead in the polls.
What lays ahead for Canadians? The incoming Trump administration has threatened to impose a 25% tariff on all imports from Canada on day 1, and with Parliament now suspended, the federal government can't pass laws. Canadians will also have to wait for a post spring election, since a non-confidence motion to bring down Trudeaus government is now out of the question. The decision by Trudeau to prorogue Parliament will effectively keep his government from implementing its proposed changes to capital gains for now, but Canadians may not be off the hook with tax changes just yet.
Polls still indicate that even with a new leader, the Liberal party will most likely lose the next election. I believe the term, "snowball's chance in hell", to quote our current Prime Minister, perfectly sums up the Liberal party's chances best.
So, with Pierre Poilievre as our likely next Prime Minister, lets look at his party's policies regarding housing that may come to influence the 2025 Real Estate market.
"Axe the tax" is the Conservative parties' slogan, and it will apply not only to carbon tax, but on the GST on new homes under 1 million also. Conservatives argue that the government is to blame for the sky high house prices because they are charging to much in sales tax. Poilievre argues that this measure will reduce the cost of a home and encourage construction of more new builds by cutting out the senseless bureaucracy that only slows the process down.
Canadians are sick of the high cost of living, and many first time buyers simply can't scrape up the necessary funds to cover the deposit and down payment needed to acquire a home. This attitude was reflected in the slow and painful 2024 real estate market, where homes sat on the market for months and months, and the expired list became the reality for far to many sellers. Many homes that were on the market last year, are still on the market today, hoping for a fresh start in 2025.
Lets not forget the impact of new measures that came into play on December 15, 2024, increasing the insured mortgage cap to 1.5 million, and extending mortgage amortizations to 30 years for first time buyers. Programs introduced by Chrystia Freeland, before her exit, which were aimed to entice more first time buyers into the housing market.
Canadians are also going to want to keep an eye on the upcoming Bank of Canada interest rate cuts, which are expected to decline further and land somewhere between 2.00 and 3.00 by mid-2025. This is good news for variable rate mortgage holders, and first time buyers who have been sitting on the sidelines.
The introduction of a new Conservative government will no doubt have an enormous impact on all Canadians, but I believe the Conservative party has rightly identified the constraints governments impose on builders, as well as the impact that high immigration has had in terms of its contribution to housing unaffordability.
As we head into the spring market, Canadians are armed with lower interest rates, more programs to help first time buyers, and the promise of Poilievre's Conservative government to make housing affordable. I predict a stronger market, with more buyers looking to snatch up a great home to start building their equity. Sellers will have to prioritize pricing strategy, and home prep, in order to be successful with todays savvy buyer.
Pierre Poilievre just may be the person to take us out of this so called "housing hell" and into an affordable era, and I personally believe the Canadian real estate market is poised for a comeback in 2025.
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