- Executive Summary
In 2025, the Canadian Real Estate Association (CREA) revised its national housing market forecast downward due to tariff-related economic uncertainty. Home sales are expected to decline slightly, while average home prices will decrease modestly compared to earlier projections. The market is highly sensitive to trade policies, interest rate trends, and regional dynamics, signaling caution for buyers, sellers, and investors.
- Key Forecast Adjustments
Metric Previous Forecast Revised 2025 Forecast Change
Home Sales +8.6% increase 482,673 units (-0.02%) Downward revision
Average Home Price $718,000 $687,898 (-0.3%) Decline of ~$30,000
2026 Outlook – Sales N/A 496,487 units (+2.9%) Moderate recovery expected
2026 Outlook – Price N/A $696,074 (+1.2%) Gradual price growth
Interpretation: The revisions reflect heightened market uncertainty due to tariffs, with national trends showing a slight contraction in activity and pricing.
- Contributing Factors
3.1 Tariff-Driven Economic Uncertainty
New tariffs on imported goods are creating market volatility.
Potential impacts include slower economic growth, higher inflation, and decreased buyer confidence.
CREA Senior Economist Shaun Cathcart emphasizes that uncertainty surrounding tariffs is limiting home sales activity.
3.2 Bank of Canada Policy
Key policy rate is maintained at 2.75%, with cautious guidance due to trade policy volatility.
Scenarios of trade war could trigger recessionary pressures and push inflation above 3% by mid-2026.
- Regional Impacts
Ontario & British Columbia: Experiencing declines in sales due to tariffs and local market pressures.
Newfoundland & Labrador, Quebec, Prince Edward Island: Expected modest gains owing to more stable local conditions.
Insight: Market effects vary regionally; national averages mask localized opportunities or risks.
- Market Outlook
CREA warns that forecasts are subject to high uncertainty, particularly due to tariffs, interest rate fluctuations, and potential stagflation.
Buyers may find opportunities in declining regions, while sellers may need to adjust price expectations.
Investors are advised to diversify portfolios and monitor regional markets carefully.
- Recommendations
Buyers
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Focus on regions with more favorable conditions.
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Consider the impact of tariffs on housing affordability.
Sellers
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Price homes realistically to reflect market uncertainty.
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Prioritize marketing and property presentation to attract serious buyers.
Investors
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Diversify holdings to mitigate economic risk.
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Stay agile to respond quickly to regional and national market shifts.