Economic threats from U.S. sap Canadian housing market, Toronto sales drop 28.5% in February

“Uncertainty about our trade relationship with the United States has likely prompted some households to take a wait-and-see attitude toward buying a home,” said Jason Mercer, chief market analyst with TRREB.

The real estate industry had predicted a rebound in the housing market after more than two years of low sales. The pent-up buyer demand combined with the Bank of Canada’s recent interest-rate cuts were expected to fuel activity this year.

But buyer confidence started to wane with the threat of tariffs. And that was before

U.S. President Donald Trump slapped 25-per-cent tariffs on most Canadian goods on Tuesday along with similar levies on Mexican products and additional tariffs on China. Canada’s first round of retaliatory tariffs target $30-billion worth of U.S. goods.

In the days leading up to the trade war, realtors and mortgage brokers reported that some of their clients had put their purchase plans on pause.

“Three of my buyers have said they are holding off,” said Tracy Valko, a mortgage broker in Kitchener, Ont., who has worked in the residential loan industry for about 35 years. “They’re more about keeping cash on hand as opposed to making a move right now,” she said.

It was a similar situation for Gin Dhillon, vice-chair of the Fraser Valley Real Estate Board in B.C. and a realtor who has sold homes in the region for nearly two decades. Ms. Dhillon said one of her clients was waiting for interest rates to drop but as the risk of a U.S. trade war escalated, the client halted their homebuying plan.

“They want a safety net,” said Ms. Dhillon, adding that her client wants to keep their funds because they don’t know how the trade war will affect the economy.

Victor Tran, a mortgage broker in the Toronto region with nearly two decades of experience, said there are lots of prospective homebuyers who are now super cautious. “There is no urgency to purchase anything right now,” said Mr. Tran, a mortgage and real estate expert with Ratesdotca, a rate-comparison website.

True North Mortgage, a Calgary-based mortgage broker and lender, said the mortgage business was slow. Its chief executive Dan Eisner said: “Realtors are telling us about half of the purchasers are holding off due to uncertainty surrounding the tariffs.”

HouseSigma Inc., a real estate brokerage with a highly popular website, said its data show that homebuyers are increasingly cautious. “Tariffs are being seen as an additional bit of bad news, just when things were somewhat settling down,” said Abhishek Singh, HouseSigma’s vice-president of strategy and operations. “There is uncertainty in the market,” he said.

In early January, the Canadian Real Estate Association had predicted a significant unleashing of demand with sales rising 8.6 per cent this year. But its senior economist Shaun Cathcart said the association may have to downgrade its forecast. He said the trade war was a “big downside risk” in the January forecast.

February sales were higher than January in some regions such as Vancouver and the Fraser Valley. In Guelph, Ont., some homes are drawing multiple offers, according to one realtor. “There’s uncertainty,” said Andra Arnold, who has been selling homes in Guelph for 17 years. But she also said: “People who’ve been waiting on the sidelines are just ready to bite the bullet now.”

In Toronto, the country’s largest real estate market, new listings fell 24 per cent from January to February. The Home Price Index, which removes the highest-priced transactions, fell 1.5 per cent to $1,063,300 over the same period.

In Vancouver, home sales rose 17.7 per cent from January to February. New listings decreased 9 per cent over the same period and the Home Price Index declined 0.3 per cent to $1,169,100, according to the local real estate board. In the Fraser Valley, sales rose 12.5 per cent, new listings fell 9 per cent and the Home Price Index was essentially flat at $962,500.

Original Article: https://www.theglobeandmail.com/business/article-economic-threats-from-us-sap-canadian-housing-market-toronto-sales/

Originally Published on March 5, 2025 by Rachelle Younglai - Real Estate Reporter