07:07 AM EST, 01/10/2025 (MT Newswires) -- Friday's Focus feature will give a 2025 Canadian housing

market outlook, said Bank of Montreal (BMO).

While the bank expects sales and prices to forge higher, it isn't predicting an exuberant rebound as in past cycles.

One reason is that valuations, while improved, still aren't

"overly compelling," stated BMO.

Using a Toronto investment condo as an example -- results will vary by location and segment -- new investors would have been deeply cash flow negative through late 2022 and 2023, even failing to pay down any principal for a short period.

Now, lower mortgage rates and the decline in home prices have set conditions back into the realm of what used to be reasonable, pointed out the bank.

Even so, BMO suspects investors will remain "shy" given limited near-term capital gains potential, lack of liquidity, economic uncertainty, tougher tax treatment versus dividends, difficult landlord-tenant conditions and a much weaker rent backdrop.

Valuations would need to push to the attractive side of

the spectrum to account for these factors and bring investors back into the market more "significantly," added the bank.