Latest data indicate dip in home resales and prices in key cities
Canada’s housing market has taken a hit as homebuyers retreat to the sidelines amid growing concerns over the US trade war. According to a new report from the Royal Bank of Canada (RBC) published on Monday, home resales dropped for the second consecutive month in markets across the country, with southern Ontario—particularly vulnerable to trade turbulence—reaching cyclical lows.
Robert Hogue, assistant chief economist at RBC, noted that while the US sparing Canada additional tariffs last week might lift some uncertainty, a meaningful rebound seems unlikely as long as trade tensions persist.
Toronto and Vancouver see sharp declines
The Toronto area has been especially hard hit, with March resales plummeting to their lowest levels since 1998—dropping more than 30% since US trade actions began in February. Market conditions have weakened to levels not seen since the challenging economic period of the early 1990s.
Property values in Toronto have started to decline, with the composite MLS Home Price Index falling to $1.05 million in March—down $35,000 (-3.2%) over the past three months, including a $15,000 (-1.4%) drop between February and March alone.
Similarly, Vancouver’s housing market, Canada’s least affordable, has shown high sensitivity to the economic uncertainty, with home resales down an estimated 23% this year. The benchmark price has reached $1.19 million in March—0.6% below last year’s figure.
Montreal and Calgary losing momentum
The trade war has knocked Montreal off its recovery trajectory. March marked the third consecutive decline in home resales, down an estimated 4% from February and 15% from December. While median prices for single-family homes and condos remain up year-over-year (8% and 5%, respectively), the growth pace has slowed considerably in recent months.
Calgary’s previously strong market is gradually cooling as well. Home resales fell more than 7% between February and March, bringing activity to its lowest level in over four years. Price appreciation has nearly stalled, with the composite index up just 0.1% from a year ago.
Shift in market dynamics
Property values are coming under pressure as inventories grow, stoking competition between sellers while demand remains hesitant. Bargaining power has clearly shifted to buyers in Vancouver, Fraser Valley, Toronto, and other southern Ontario markets.
While some Prairie markets and parts of Quebec and the Atlantic region appear to be holding up relatively well, they aren’t immune to trade-induced anxiety, as evidenced by falling resales in Saskatoon and Regina in March, the RBC noted.
As supply continues to build—partly due to new condo completions in some markets and strong housing construction in others—RBC expects the downward pressure on prices to continue in the near term, particularly if trade tensions escalate further.
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