Budget 2025: What It Means for Realtors

The Bottom Line

Budget 2025 paints a cautiously optimistic picture for Alberta's housing market. The Fiscal Plan calls housing a "bright spot" in the economy despite trade uncertainty, forecasting 43,000 housing starts in 2025, buoyed by population growth and builders playing catch-up with demand. However, starts are declining from 2024's peak of nearly 48,000 units and will ease further to 37,800 by 2028. For your business, the combination of $767 million in affordable housing investment, moderating interest rates at 3.10% on 10-year bonds, and continued population growth of 2.5% means sustained activity, even as the pace gradually cools.

Top Measures That Affect You

1. Housing Starts Forecast: Resilient but Declining

Alberta's housing starts surged to an annual pace of almost 48,000 units in 2024, exceeding all other provinces on a per capita basis. For 2025, the budget forecasts 43,000 starts, moderating to about 41,000 in 2026 and 37,800 by 2028. The Fiscal Plan expects residential building permits to hover around an eight-year high, signalling continued near-term construction activity that generates listing inventory for your market.

2. Interest Rate Assumptions Support Buyers

The budget assumes the 10-year Government of Canada bond rate at 3.10%, down from 3.30% the prior year. Lower long-term rates translate into more affordable fixed-rate mortgages for your buyers. The 3-month rate is assumed at 2.30%, reflecting the Bank of Canada's easing cycle. Mortgage rule changes, particularly longer amortizations for first-time homebuyers, will further support demand.

3. Population Growth: Moderating but Still Strong

Alberta's population growth is forecast at 2.5% in 2025, down significantly from 4.4% in 2024. Net migration of approximately 102,200 people is expected. While slower growth means less demand pressure than the exceptional 2023-2024 period, the level remains historically strong and continues to drive housing need. The budget notes the level of housing stock relative to household formation is expected to move closer to its historical average in the coming years.

4. Affordable Housing Investment: $767 Million

The Alberta Social Housing Corporation (ASHC) receives $767 million over three years to expand housing options for seniors, families, and individuals under the Affordable Housing Strategy. This includes support for Indigenous housing and $50 million per year for lodges. ASHC expense is increasing by $245 million in 2025-26 to $641 million. Over 110,000 Albertans in 60,746 households receive ASHC support.

5. Shelter Costs Easing

The Fiscal Plan identifies shelter costs as a key driver of price pressures but notes they are set to ease with lower interest rates and increased housing supply. CPI inflation is forecast at 2.6% in 2025. For your buyers, this means the affordability squeeze is gradually loosening.

6. Personal Income Tax Cut Benefits Buyers

The new 8% tax bracket on the first $60,000 of income saves potential homebuyers up to $750 per person per year. For a couple, that is up to $1,500 in additional disposable income that could go toward a down payment or mortgage qualification. Workers earning less than $60,000 see their personal income taxes fall by approximately 20%.

7. Education Property Tax Increases

After being frozen in 2024-25, education property tax rates will increase in 2025-26 to $2.72 per $1,000 of equalized assessment for residential properties and $4.00 per $1,000 for non-residential. Inform your clients about this upcoming increase in their property tax bills.

Direct Financial Impact

Transaction volumes: With housing starts declining from the 2024 peak and population growth moderating, expect gradually declining new home transaction volumes over the forecast period. However, the Fiscal Plan notes that construction of purpose-built rental units is expected to stay strong as rental vacancy rates are still relatively low.

Resale market: Population growth of 2.5% and falling borrowing costs support resale demand. With approximately 102,200 net migrants expected in 2025, many will be entering the resale market. Real residential investment growth is expected at around 2% annually over the medium term.

Mortgage qualification: Lower interest rates improve qualification ratios for your buyers. The assumed 3.10% 10-year rate suggests fixed mortgage rates in the range that makes qualification easier than the 2023-2024 peak period.

Commercial real estate: Non-residential building investment was picking up in 2024, led by factory expansions. Tariff uncertainty may slow this momentum, but rising costs for building materials could dampen construction growth, tightening existing commercial inventory.

Economic context: The unemployment rate is forecast at 7.4%, up from 7.0%. Higher unemployment can slow buyer confidence and lead to more listings from distressed sellers. Per capita real consumer spending is forecast to decline again, though at a more moderate rate.

Service Changes

Health system agencies: The creation of Assisted Living Alberta as a new provincial health agency managing continuing care could affect demand patterns for seniors housing. As the agency focuses on making the full continuum of care available, some seniors may age in place longer, affecting downsizing timelines.

Municipal infrastructure: The Local Government Fiscal Framework receives $2.5 billion, supporting municipal infrastructure that makes communities attractive to your buyers. Edmonton receives $106 million over three years for downtown revitalization.

Purpose-built rental: The government's affordable housing programs include rental assistance that supports landlords and tenants. If you work in the rental market, increased government support for rental housing creates opportunities.

Homelessness funding: $220 million is budgeted for homeless and outreach support services in 2025-26. Investment in homelessness reduction supports community livability in neighbourhoods where you sell.

What's Missing

No first-time homebuyer provincial credit: Despite the tax cut, the budget does not introduce a provincial first-time homebuyer tax credit or savings matching program.

No rent-to-own program: The budget does not announce a provincial rent-to-own initiative that could help bridge renters into homeownership.

No foreign buyer measures: The budget does not address foreign buyer participation in the Alberta housing market, either to restrict or attract international investment.

No realtor-specific regulatory changes: The budget does not mention changes to real estate regulatory framework or commission structures.

No land supply acceleration: While housing starts remain strong, there is no specific initiative to accelerate land development approvals or municipal zoning reform to increase buildable lot supply.

Key Dates

Date	Event
January 1, 2025	New 8% personal income tax bracket takes effect
February 27, 2025	Budget 2025 tabled
April 1, 2025	2025-26 fiscal year begins
After July 1, 2025	Adjusted payroll withholdings reflect tax cut on paycheques
2025-26	Education property tax rate increases to $2.72/$1,000 residential
2025	Housing starts forecast at 43,000 units
2026	Housing starts forecast to moderate to ~41,000 units
2027-28	Housing starts ease to ~37,800; supply-demand balance normalizing

Where to Get Help

• Alberta Real Estate Association (AREA): For industry advocacy and budget impact analysis.
• Alberta Treasury Board and Finance: For tax cut details and economic assumptions. Visit alberta.ca/budget.
• Alberta Social Housing Corporation: For information on affordable housing programs. Contact through alberta.ca/affordable-housing.
• Canada Mortgage and Housing Corporation (CMHC): For housing market data and mortgage insurance information. Visit cmhc-schl.gc.ca.
• Your local real estate board: For regional market data and transaction trend analysis.