In March, the Canadian housing market experienced a notable decline in both home sales and prices, primarily due to escalating global trade tensions linked to U.S. tariff policies. Data from the Canadian Real Estate Association (CREA) revealed that national home sales decreased by 4.8% compared to February, marking the fourth consecutive month of decline. Since reaching a peak in November, sales have plummeted by 20%, indicating a significant downturn.

On an annual basis, March sales fell by 9.3%, representing the weakest performance for this month since 2009. This decline underscores the increasing challenges facing the real estate sector. CREA’s Home Price Index also reflected a 1% drop in March, contributing to an annual decrease of 2.1%. Additionally, the national average selling price was down 3.7% compared to the same period last year, signaling a broader cooling trend across various housing markets.

The deteriorating outlook for the housing market is largely attributed to trade frictions initiated by the United States. Tariffs imposed by President Donald Trump on Canadian goods, particularly affecting key sectors like the automotive industry, have led to retaliatory measures from Canada. Despite several interest rate cuts by the Bank of Canada since June aimed at stimulating economic activity, these monetary policies have proven inadequate in mitigating the adverse effects of trade conflicts.

In light of these challenges, CREA has revised its sales forecast for 2025, now projecting that 482,673 residential properties will be sold, which represents only a slight increase from the anticipated sales figures for 2024. This adjustment starkly contrasts with CREA’s earlier forecast in January, which had predicted an 8.6% rise in sales.

Adding to the grim outlook, Canada’s national housing agency reported a decline in new construction. Housing starts in March fell by 3.3% from the previous month, resulting in an annualized rate of 214,155 units—significantly lower than the 242,500 units that economists had anticipated. This decline suggests that both the demand and supply sides of the housing market are under considerable pressure.

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