Canada’s housing market took a significant hit in February as uncertainty surrounding U.S. tariffs weighed heavily on buyer confidence. According to the Canadian Real Estate Association (CREA), home sales dropped 10.4% compared to the same month last year, marking the lowest sales level since November 2023. On a seasonally adjusted basis, transactions fell 9.8% from January, the largest month-over-month decline since May 2022.
Shaun Cathcart, Senior Economist at CREA, linked the slowdown directly to market jitters sparked by U.S. trade policy shifts.
“The moment tariffs were first announced on January 20, a gap opened between home sales recorded this year and last,” said Cathcart. “That gap continued to widen throughout February, leading to a significant—but hardly surprising—drop in activity.”
Royal LePage President Phil Soper echoed these concerns, noting that initial uncertainty surrounding the new U.S. administration has now solidified into apprehension among homebuyers.
“In the early days of Trump’s presidency, many dismissed his statements as rhetoric,” said Soper. “By February, people had settled into a worried acceptance that a trade war was becoming reality, and home sales declined accordingly.”
- Toronto’s Housing Market Hit Hardest: The Greater Toronto Area (GTA) saw the most pronounced slowdown, but the trend extended across three-quarters of all local markets, CREA reported.
- New Listings Drop: Sellers also appeared hesitant, as new listings fell 12.7% month-over-month following a surprising increase in January.
- Home Prices Decline: The actual national average sale price in February was $668,097, down 3.3% from last year. The home price index fell 0.8% from January and 1% year-over-year, with Toronto experiencing a 1.5% drop.
- Buying Opportunities Emerge: The recent Bank of Canada rate cut is helping to improve affordability, but experts say confidence needs to return before the market stabilizes.
Despite strong employment numbers and steady savings rates, consumer confidence remains the key hurdle for market recovery. TD Senior Economist Leslie Preston noted that the Bank of Canada’s interest rate cut may provide some relief, but a rebound will likely depend on whether the U.S. trade environment stabilizes.
“As long as the U.S. keeps the threat of punitive tariffs alive, confidence in the housing market is likely to be under a cloud,” Preston said.
The real estate industry continues to monitor developments closely, hoping for clarity that could help restore buyer confidence in the months ahead.