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Canada's housing market continued its decline in March, with national home sales falling 4.8% from February and 9.3% year-on-year-the weakest March since 2009, according to CREA. This marks a 20% drop in sales since November. Home prices also fell, with the average price down 3.7% annually and the Home Price Index slipping 1% in March. The slowdown is linked to global trade tensions, particularly U.S. tariffs on Canadian goods. Despite interest rate cuts by the Bank of Canada, economic uncertainty persists. CREA has lowered its 2025 sales forecast, and housing starts fell 3.3% in March, signaling weakness on both demand and supply fronts.
In March, Canadian home sales and prices continued to decline, reflecting mounting concerns over global trade tensions primarily driven by U.S. tariff policies. According to data released by the Canadian Real Estate Association (CREA), national home sales fell by 4.8% compared to February. This marks the fourth consecutive monthly drop, totaling a 20% decrease since reaching a recent high in November. The housing market, once poised for a rebound, now faces significant uncertainty amid broader economic pressures. Advertisement
On an annual basis, sales dropped 9.3%-the weakest performance for the month of March since 2009-highlighting the growing challenges facing the real estate sector. CREA's Home Price Index recorded a 1% decline in March, bringing the annual decrease to 2.1%. Similarly, the national average selling price was 3.7% lower than the same period last year, indicating a broader cooling trend across various housing markets.
The worsening outlook is largely attributed to trade frictions initiated by the United States. Tariffs imposed by President Donald Trump on Canadian goods-including key sectors such as the automotive industry-have provoked retaliatory measures from Canada. Despite several interest rate reductions implemented by the Bank of Canada since June in an attempt to support economic activity, these monetary policies appear to be insufficient in offsetting the damage inflicted by trade conflicts.
Reflecting these concerns, CREA has revised its forecast for 2025. The new projection anticipates that 482,673 residential properties will be sold in 2025, which is only a marginal increase from the expected sales figures for 2024. This is a stark contrast to CREA's previous forecast in January, which had projected an 8.6% rise in sales.
Adding to the bleak 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. This figure was significantly below the 242,500 units that economists had expected, suggesting that both demand and supply sides of the housing market are under pressure.
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