Tariff Fears Drive "Sharp" Decline In Canadian Home Sales

In February 2025, Canadian home sales experienced a significant decline, with transactions dropping 9.8% compared to January. This marks the largest monthly decrease since May 2022, bringing sales to levels not seen since November 2023. On an annual basis, sales fell by 10.4% compared to February 2024.

The Canadian Real Estate Association (CREA) attributes this downturn to uncertainties stemming from a developing trade war with the United States. Shaun Cathcart, CREA's Senior Economist, noted that the announcement of tariffs on January 20 led to a widening gap between current and previous year's home sales, resulting in a predictable decline in monthly activity.

This downward trend was widespread, affecting three-quarters of local markets and nearly all large markets across the country. The Greater Toronto Area and the surrounding Greater Golden Horseshoe regions, known for some of Canada's highest property prices, experienced the most pronounced slowdowns.

Alongside the drop in sales, new property listings decreased by 12.7% month-over-month in February, following an unexpected 11% surge in January. Despite this decline, there were 146,250 properties listed for sale nationwide in February, up 13.1% from the previous year but still below the long-term average of 174,000 for this time of year.

The national sales-to-new listings ratio slightly increased to 49.9% in February from 48.3% in January. The months of inventory—a measure of how long it would take to sell all current listings at the current sales pace—rose from 4.1 to 4.7 months between January and February, just below the long-term average of five months.

Home prices also softened, with the National Composite MLS Home Price Index (HPI) declining by 0.8% in February—the most significant monthly drop since December 2023. This decrease was particularly evident in Ontario's Greater Golden Horseshoe region, reflecting the broader national trend of price adjustments amid economic uncertainty. citeturn0news29