Tariff Fears Lead to Decline in Canadian Home Sales
Canadian Home Sales Decline Amid Tariff Anxiety and Election Concerns
The Canadian home market faced challenges in March 2025. Home sales fell for the fourth month in a row. The ongoing tariff dispute with the United States and the upcoming federal election are driving uncertainty. As a result, many buyers are adopting a wait-and-see approach. The typical busy spring market has slowed significantly this year.
Market Faces Slowdown Due to Tariff Disputes and Election Anxiety
Tariff uncertainty and the upcoming election have caused hesitation among homebuyers. The spring market, usually filled with activity, is slower than usual. Ontario and British Columbia saw the biggest impacts, but the slowdown is spreading across Canada.
Learn more about how tariff uncertainty affects the Canadian home market here.
Canadian Home Sales Reach Lowest Level Since 2009
Sales dropped by 4.8% from February to March. This pushed sales 20% below the peak seen in November 2024. On a year-over-year basis, sales were down by 9.3%. This marks the weakest sales performance for March since the 2008 financial crisis.
Shaun Cathcart, CREA’s Senior Economist, said, “Sales have fallen mostly due to tariff uncertainty. The Canadian home market is now dealing with the economic fallout of this uncertainty. What was expected to be a recovery year is now simply a struggle.”
Inventory Builds as Sellers Return to the Market
New listings rose by 3% in March. However, the drop in sales led to a fall in the sales-to-new listings ratio. The ratio hit 45.9%, the lowest since February 2009. At the end of March, 165,800 properties were listed for sale on Canadian MLS® Systems. This is an 18.3% increase compared to last year, but still below the long-term average.
The national inventory at the end of March was 5.1 months, the highest since early in the pandemic.
Canadian Home Prices Reflect Demand Shift
Home prices are starting to show the effects of the slowdown. The National Composite MLS® Home Price Index fell by 1% from February to March. This is the steepest month-over-month decline since November 2023. The biggest price drops were in British Columbia and Ontario’s Greater Golden Horseshoe. However, prices continued to rise in the Prairies, Quebec, and the East Coast.
Year-over-year, the Home Price Index dropped by 2.1%. The national average home price was $678,331 in March 2025. This is a 3.7% decrease from March 2024.
Valérie Paquin, Chair of CREA’s Board of Directors, said, “While sales have fallen across Canada, some areas still see high sales, low inventory, and rising prices.”
For more details on Canadian home prices and regional trends, click here.
CREA Revises 2025 Canadian Home Price Forecast
Due to the slowdown, CREA adjusted its price forecast for 2025. The national average home price is expected to fall by 0.3%, reaching $687,898. This is about $30,000 lower than earlier forecasts. British Columbia and Ontario are expected to see minor price decreases. Other provinces may see price growth of 3% to 5%.
Looking ahead to 2026, CREA predicts a 2.9% increase in national home sales, reaching 496,487 units. Despite this growth, sales will remain below the half-million mark for the fourth straight year. The average home price is expected to rise by 1.2%, reaching $696,074 by 2026.
