Canada's housing market experienced a slowdown in January as home sales dropped and new property listings surged. According to the Canadian Real Estate Association (CREA), economic uncertainty, particularly surrounding potential tariffs and trade tensions with the United States, played a key role in this shift.
Key Market Trends
Sales Decline: National home sales fell by 3.3% from December to January.
Listings Surge: Newly listed properties increased by 11%, the largest jump since the late 1980s, excluding pandemic-related fluctuations.
Price Movement: The national average home price rose 1.1% year over year to $670,064. However, CREA’s Home Price Index remained relatively flat due to ongoing softness in Ontario and British Columbia.
The national inventory stood at 4.2 months at the end of January, indicating a balanced market, as defined by CREA’s range of 3.6 to 6.5 months. However, the sales-to-new listings ratio dropped to 49.3%, placing it at the lower end of the balanced range (45% to 65%).
Economic Outlook and Buyer Opportunities
The Bank of Canada’s recent interest rate cut—lowering its policy rate by 25 basis points to 3%—may encourage more buyers to enter the market. Analysts predict further rate reductions throughout the year, which, coupled with softening prices, could create favourable conditions for buyers.
CREA Chair James Mabey anticipates increased real estate activity in the spring but cautions that ongoing trade tensions could impact the market. “While uncertainty about the economy and jobs will no doubt keep some prospective buyers on the sidelines, a softer pricing environment alongside lower interest rates will be an opportunity for others,” Mabey stated.
Looking Ahead
As spring approaches, the Canadian real estate market is expected to see more activity, driven by seasonal trends and potential interest rate cuts. However, the lingering threat of a trade war and its broader economic effects will remain a key factor to watch. Buyers and sellers alike should stay informed and consider how these market dynamics may impact their decisions.
