Canada’s housing price forecast cut: Fitch

Amid a deteriorating economic outlook and expectations for a weaker job market, Fitch Ratings is slashing its forecast for Canada’s housing market.

In its mid-year update to its forecasts for the global housing market, the rating agency cut its expectations for home price growth for Canada down to a range of just 0% to 3%, from its previous forecast of gains of between 7% and 10%.

“Rising unemployment and prospective buyer caution compound the effect of low affordability on demand,” Fitch said.

Approximately 60% of the mortgages that are renewing this year will renew at higher interest rates, it noted.

Despite the gloomier outlook for home prices, Fitch also said that it expects delinquencies in the Canadian market to remain stable, bolstered by wage growth and borrowers’ home equity.

While its forecast for Canada’s housing market was cut most severely, Fitch also revised its housing price forecasts down for the U.S., Mexico and the Netherlands.

For the global housing market overall, the rating agency said that it continues to expect broad growth in home prices and low arrears for the second half of 2025.

“Housing supply constraints are driving price growth, and stable-to-declining mortgage rates are helping sustain demand despite slowing global economic growth, it said.

However, it noted that “downside risks persist” — given the gloomier economic outlook for many countries, amid higher tariffs and trade disruptions.

“Concerns about deteriorating macroeconomic conditions may keep potential homebuyers on the sidelines. This hesitation could weigh on home prices,” it said.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.