Spring is usually when Canada’s housing market blooms. However, this year’s activity appears watered down by the threat of tariffs.
Data from the Canadian Real Estate Association (CREA) showed home sales in Canada declined 9.8% annually in February and the annual price of a home in Canada fell 3.3%.
Activity has slowed even since January with the number of newly listed properties in Canada dropping 12.7%.
According to CREA, the market decline aligned with Donald Trump’s taking the White House.
“Before tariffs really entered the narrative, it was widely expected that this was going to be quite a hot spring housing market,” —Penelope Graham, mortgage expert at Ratehub.ca.
At the start of 2025, inflation remained close to the Bank of Canada’s 2% target rate since last summer. In addition, six consecutive interest rate cuts made it easier for Canadians to borrow money.
“The moment tariffs were first announced on January 20, a gap opened between home sales recorded this year and last. This trend continued to widen throughout February, leading to a significant, but hardly surprising, drop in monthly activity,” —Shaun Cathcart, CREA senior economist.
Almost five months’ worth of housing inventory stacked up by the end of February.
Clay Jarvis, mortgage expert at NerdWallet Canada, went as far to say “The spring housing market is dead on arrival” (Global News).
Along with the sprinkles of Spring snow and budding leaves, uncertainty hangs in the air. Trump intends to implement reciprocal tariffs on April 2nd.
“When you can’t plan for the next six months, it’s really hard to take on a 25-year mortgage,” Jarvis told Global News.
Despite the complications, he argues that slow market activity doesn’t reflect housing demand.
“People want to buy homes. It’s Canada. People see homes as a major investment. They see it as their retirement. People want homes. They just don’t want to be shackled by a mortgage at a time when they don’t know if they’re going to have a job three to six months from now,” he said.
Do you think the tariffs will go through or is this just another political stunt?
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