The Canadian housing market continues to tread cautiously into 2025, as tariff uncertainty and broader economic instability weigh heavily on buyer sentiment and national performance. According to the Canadian Real Estate Association (CREA), March marked a historic low for the housing market, with national home sales falling 9.3% year-over-year—the weakest level for that month since 2009.

Sales Hit a Wall Amid Uncertainty

CREA Senior Economist Shaun Cathcart noted that while early signs pointed to a strong rebound year, the reality of tariffs and potential economic fallout have sharply reversed expectations. “We’ve gone from a slam dunk rebound year to treading water at best,” Cathcart explained in CREA’s March release.

Sales declines were sharpest in Ontario and British Columbia, though nearly all markets across Canada reported lower activity, with only a few small exceptions. The national average home price dropped 3.7% to $678,331, while the National Composite MLS Home Price Index slipped by 1% in March—marking the steepest month-over-month dip since November 2023.

Inventory on the Rise

Inventory levels climbed in March, with 5.1 months of supply on the market—the highest since the early days of the pandemic. New listings also rose by 3%, pushing the sales-to-new listings ratio down to 45.9%, the lowest level of market balance since February 2009. Though 165,800 properties were listed for sale, this remains slightly below the historical March average of 174,000.

While Ontario and BC continue to experience price softening, other provinces like Quebec, the Prairies, and the East Coast saw prices push higher, reflecting ongoing regional variation in housing dynamics.

Forecasts Revised Amid Volatility

Due to rising uncertainty, CREA significantly downgraded its 2025 and 2026 forecasts. Now, 482,673 residential properties are expected to sell in 2025—essentially flat from 2024 and a dramatic shift from the 8.6% increase projected earlier in January. CREA also forecasts a modest recovery in 2026, with 496,487 transactions, though still falling short of pre-pandemic activity.

The national average home price is now expected to dip 0.3% in 2025 to $687,898, approximately $30,000 lower than CREA’s January forecast. A mild recovery is projected for 2026, with prices rising just 1.2% to $696,074. CREA predicts minor declines in average home prices in Ontario and BC, while other provinces may see gains in the range of 3–5%.

Outlook: A Market in Holding Pattern

As the Bank of Canada weighs further action amid signs of stagflation, and with no clarity yet on how interest rates may move, homebuyers and investors alike remain cautious. The CREA emphasized that “forecasts continue to be subject to unprecedented levels of uncertainty,” underscoring the need for adaptability in a volatile market.

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