As the Canadian housing market continues to shift in 2025, understanding what truly drives real estate trends has never been more important. In a recent interview on the North Pacific Homes Group YouTube channel, host Alex Hughes sat down with Daniel Foch—Broker and Chief Real Estate Officer at Valery.ca, and co-host of The Canadian Real Estate Investor Podcast —to unpack some of the biggest misconceptions shaping how Canadians view real estate today.
This conversation dives into why homeownership isn’t always the investment people assume it to be, how high-debt markets like Toronto and Vancouver are reacting to current conditions, and what emerging factors like AI-driven sentiment analysis could mean for the future of the housing market. Whether you’re a first-time buyer, seasoned investor, or simply keeping an eye on where the market is headed, these insights offer a grounded perspective on what to watch in 2025.
Myth #1: Homeownership is Purely an Investment
One of the most persistent beliefs among Canadians is that buying a home is primarily an investment strategy. Daniel Foch challenges that idea, explaining that real estate’s true value lies in its ability to act as a forced savings mechanism. Unlike renting, ownership requires consistent mortgage payments that build equity over time. But as Foch points out, this doesn’t mean every homeowner is guaranteed a financial windfall.
“People often view their home as an investment when it’s really a form of disciplined savings,” says Foch. “It’s an asset that forces you to save—but not necessarily one that guarantees returns like other investments.”
For homeowners in Victoria and across Canada, this perspective reframes real estate as both a lifestyle choice and a financial commitment—one that must be understood in context with interest rates, debt levels, and long-term affordability.
Market Sensitivity: Why Toronto and Vancouver Are Feeling It More
Foch highlights how debt sensitivity is amplifying the downturn in Canada’s largest real estate markets. Cities like Toronto and Vancouver saw record price growth during the pandemic, driven by low interest rates and investor demand. Now, as borrowing costs rise, these markets are experiencing sharper corrections.
“The higher you climb, the harder you fall,” Foch explains. “Markets that saw the biggest price run-ups are naturally the ones feeling the most pressure as rates normalize.”
By contrast, areas like Victoria, BC, which saw more moderate growth, remain relatively stable. While higher rates are slowing sales, Victoria’s fundamentals—limited land supply, strong local economy, and desirable lifestyle—continue to support long-term resilience.
Submarkets Worth Watching: The Rise of the 705 Region
When asked about promising submarkets, Foch points to the 705 area code region (which includes areas north of Toronto such as Barrie, Orillia, and Peterborough). These regions offer more affordability, attracting buyers who have been priced out of major urban centres.
For Canadians looking for opportunity in 2025, these secondary markets illustrate a broader shift: affordability, lifestyle, and work-from-home flexibility are increasingly defining buyer decisions. Even in Vancouver Island communities near Victoria, similar dynamics are emerging as buyers seek better value and space.
Beyond the Data: How Sentiment Shapes the Market
Traditional housing data—like sales, listings, and price averages—tell only part of the story. Foch argues that consumer sentiment has become a leading indicator of market direction. Today, technology is allowing analysts to use AI-driven sentiment analysis to measure public perception from online conversations, search trends, and social media.
“Sentiment tells you where the psychology of the market is heading before the data catches up,” Foch notes. For agents, investors, and buyers in Victoria, monitoring sentiment can reveal early signals of shifts—from buyer confidence returning to emerging fears about affordability.
Policy Catalysts: What Could Shift the Market in 2025
No discussion about Canadian real estate is complete without addressing policy. Foch identifies OSFI’s B20 mortgage stress test as one of the most powerful levers shaping the housing landscape. If the federal government or OSFI decides to adjust or remove the stress test, borrowing capacity could increase overnight, potentially reigniting demand.
However, he cautions that policymakers are balancing affordability with financial stability. A hasty change could risk overheating the market again.
Foch also discusses the foreign buyer ban, which he says has had limited impact compared to existing provincial measures like BC’s foreign buyer tax and speculation tax. These local regulations had already cooled external investment before the federal policy took effect.
Key Takeaways for Homebuyers and Market Watchers
- Think long-term, not short-term. Your home is both a place to live and a financial discipline tool—not a get-rich-quick investment.
- Watch debt sensitivity. Markets with high leverage (Toronto, Vancouver) will likely remain volatile.
- Look beyond city limits. Submarkets outside major metros may offer better value and stability.
- Pay attention to sentiment. AI and data analytics can now reveal where market psychology is heading.
- Monitor policy changes. Mortgage regulations and lending rules could reshape the market faster than most realize.
Final Thoughts
As 2025 unfolds, the Canadian housing market continues to evolve under the weight of policy, affordability, and shifting consumer behavior. Conversations like this one with Daniel Foch offer clarity in a sea of speculation. For buyers, sellers, and market watchers in Victoria, BC, the takeaway is simple: stay informed, think strategically, and view real estate not just as a financial asset—but as a long-term component of your financial health.
At North Pacific Homes Group with eXp Realty, our team keeps a close eye on emerging trends that impact homeowners and investors across Vancouver Island and beyond. Whether you’re exploring your first purchase or planning your next move, we’re here to help you make data-driven, confident decisions in today’s evolving market.
For personalized advice or the latest Victoria real estate insights, contact us today.
