March 17, 2025
Real Estate News
Canadian home sales saw a significant drop in February, marking the largest decline in nearly three years. According to data from the Canadian Real Estate Association (CREA), sales fell by 9.8% compared to January and were down 10.4% year-over-year.
The uncertain economic outlook, exacerbated by a developing trade war, has led many buyers to delay major financial commitments.
Market Uncertainty Affecting Buyer Confidence
James Mabey, Chair of CREA, noted that recent economic instability has caused potential buyers to rethink their purchasing decisions.
With inflationary pressures and economic forecasts predicting slower growth, the hesitation in the market reflects broader concerns about affordability and financial security.
Impact of Tariffs on Real Estate and Economic Growth
The Organisation for Economic Co-operation and Development (OECD) has projected that recent tariff increases imposed by the U.S. government will negatively impact economic growth in Canada, Mexico, and the United States.
These trade restrictions are also expected to contribute to rising inflation, further complicating the housing market landscape.
Home Prices and Housing Starts Also Declining
The latest figures show that the Home Price Index declined by 0.8% on a monthly basis and 1% annually. Additionally, the national average selling price was down 3.3% compared to the previous year.
Meanwhile, data from the Canadian Mortgage and Housing Corporation (CMHC) revealed a 4% drop in housing starts for February, with the seasonally adjusted annualized rate falling to 229,030 units.
Analysts had anticipated a rebound to 250,000, but the slowdown in new construction suggests ongoing caution among developers and investors.
What This Means for Rental Property Owners
For rental property investors, declining home sales and slowing construction could create both challenges and opportunities. Lower property prices may offer a chance to buy investment properties at a lower cost. A possible drop in homeownership rates could increase the demand for rental housing.
However, economic uncertainty and rising costs could impact rental pricing and tenant affordability. At Royal York Property Management, we continue to monitor market trends to help property owners navigate these shifts.
Source: Reuters
