Canadian Real Estate Market Sees Weakest March Since 2009; Ontario and GTA Prices Fall Amid U.S. Tariff Uncertainty and Rising Mortgage Rates
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The Canadian real estate market is experiencing a downturn, with home sales in March marking the weakest performance since 2009, primarily due to ongoing tariff uncertainty with the United States. The Canadian Real Estate Association (CREA) reported a 4.8% decline in national home sales from February to March, and a 9.3% drop year-over-year, reflecting a broader trend of declining sales over the past four months. CREA also noted that 45% of Torontonians are not confident in the country's economy, and 66% of those looking to purchase a home have delayed their plans due to the trade dispute.
In Ontario, the impact of tariff-related uncertainty has led to a second consecutive month of falling home prices. The average price of single-family homes in the province dropped 4.7% year-over-year to $907,300 in March. This trend is particularly pronounced in the Greater Toronto Area (GTA), where single-family house prices fell 4.3%, condos by 5.4%, and townhouses by 1.8% compared to the previous year. The national average home price was $678,331 in March 2025, down 3.7% from the previous year.
The U.S. trade war is also affecting the GTA, with Royal LePage reporting a year-over-year decrease in the aggregate price of a home by 2.7% to $1,146,100 in the first quarter of 2025. The report attributes this decline to a general sense of unease among buyers due to the trade conflict, which has led to a significant slowdown in the housing market. There were 5.1 months of inventory nationally at the end of March, and 165,800 properties listed for sale across Canada, with a sales-to-new listings ratio of 45.9%.
Amidst this uncertainty, mortgage rates in the U.S. have surged, prompting a shift among homebuyers towards riskier adjustable-rate mortgages (ARMs) to secure lower initial rates. The average contract interest rate for 30-year fixed-rate mortgages increased to 6.81% from 6.61%, while the ARM share reached 9.6%, the highest since November 2023. Total mortgage application volume fell 8.5% last week, with applications for home purchases dropping 5% and refinancing applications declining 12%. Builders have reported a 6.3% price increase in building materials due to tariffs, adding an estimated $10,900 to the cost of a new home.
