Happy New Year! As we step into 2025, Canadians face a challenging economic landscape filled with uncertainties. The first week of the new year brought major political and economic shifts:

• Prime Minister Justin Trudeau has resigned, and Parliament has been prorogued until March 24, 2025.
• In two weeks, Donald Trump will return as President of the United States, threatening a 25% tariff on Canadian imports.

These developments could have a massive impact on the economy, affecting industries and consumer behavior across Canada, including the housing market.

Why Calgary's Housing Market Thrived Amid Rising Interest Rates

Even with interest rates climbing from 3.7% in mid-2022 to 7.2% in October 2023, Calgary's housing market remained resilient. Key factors include:

• Shortage of housing supply in the market.
• An influx of people relocating to Calgary, including immigrants from Asia, India, and the Middle East, as well as Canadians from provinces like B.C. and Ontario seeking affordability.

Predictions for Calgary's 2025 Housing Market

1. Balanced Market Expected

Current inventory is around 2 months of supply, and by March-April 2025, it could rise to 2.5 months of supply, creating a balanced market.

2. Immigration Policy Changes

The Federal Government has reduced immigration targets by 20%:

• 2025: 395,000 new immigrants (previously 500,000)
• 2026: 380,000 new immigrants

Reduced immigration may slightly ease housing demand.

3. Improved Affordability for First-Time Buyers

Lower interest rates (prime rate at 5.45%) and 30-year amortization options will enable more first-time buyers to enter the market.

4. Economic Uncertainty May Impact Housing

Potential 25% tariff from the U.S. could affect industries like oil, gas, lumber, and steel, leading to job losses in some sectors. Economic challenges may force some homeowners to sell and downsize or move into rentals.

Market Outlook for 2025

Early 2025 may present challenges with economic instability, but the market is expected to stabilize by spring. Increased housing supply could put downward pressure on prices, with a possible 3-5% price adjustment by year-end.