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Canada’s housing market has cooled notably due to escalating U.S. tariffs on Canadian exports. An April CREA report highlighted that March sales hit their weakest level since 2009, dropping nearly 5% month-over-month and 9.3% year-over-year, with the national average sale price down about 3.7% annually. This downturn deepened in February, with home sales plunging 9.8% from January—the steepest drop since mid-2022—and overall prices falling over 3% year-over-year. Experts attribute the slide largely to trade-war anxiety dampening buyer confidence, particularly as employment uncertainty grows.

A recent Reuters poll (June 26) of 16 housing analysts forecasts a 2% national drop in home prices by year-end, marking a reversal from earlier projections of modest gains. This contrasts with a March poll, which anticipated a slight 2% price increase—but still lagging behind inflation—showing how sentiment has shifted amid growing trade tensions. Big-city markets are particularly under pressure: Toronto is projected to see prices fall by 4% and Vancouver by 2% in 2025.

While the Bank of Canada’s 225 bp rate cuts have helped buffer the market, they haven’t reversed the trend. Rising inventory and improved affordability, especially for first-time buyers, have offered some stability—but experts warn recovery hinges on resolution of the tariff dispute and further monetary easing, with a possible modest rebound in 2026 if those conditions are met. Most analysts expect home prices to “stagnate” next year and then return to slow growth as trade friction abates and policy support continues.

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