How Trump’s Tariffs Impacted Canada’s Housing Market

We analyzed data from five major Canadian real estate markets (Toronto, Vancouver, Ottawa, Calgary, and Halifax) to see how Trump’s 2024 tariffs have shaped Canada’s housing market.

First, we established nationwide benchmarks for home prices, sales volumes, and inventory levels to understand the pre- and post-tariff landscape.

Then, we looked at how tariff-driven economic uncertainty, interest rate shifts, and construction costs affected market dynamics across each city.

Our findings revealed several notable — and often surprising — trends about which regions are cooling, which remain resilient, and how Canada’s housing market may evolve in 2025.

Key Insights

• Tariff Impact Overview:
  
  • Donald Trump’s re-election in 2024 brought new U.S. tariffs on Canadian exports, sparking widespread uncertainty in Canada’s housing market.
    
  • Nationally, home sales fell ~10.4% year-over-year in early 2025, reversing late 2024 gains.
    
  • Average home prices have either leveled off or declined slightly — down ~3.3% year-over-year at the national level as of February 2025.
    
  • Supply levels are up across Canada (active listings +13% YoY), and months of inventory have climbed to ~4.7 months nationally, indicating a move toward balanced conditions.
    
  • Despite cooling sales, prices have not collapsed; instead, most major markets remain in a balanced or mildly buyer-friendly stance.
    
• Toronto (GTA):
  
  • Sales dropped ~27% year-over-year in February 2025, while new listings rose 5.4%.
    
  • The average selling price dipped 2.2% YoY to about $1.084 million.
    
  • Inventory hit a 10-year high for February; the sales-to-new-listings ratio (~33%) points to a buyer’s market in many GTA neighborhoods.
    
• Vancouver (Metro Vancouver):
  
  • Sales fell 11.7% YoY, yet prices remain relatively flat or slightly up thanks to continued demand and limited land.
    
  • The MLS® HPI composite benchmark is around $1.185 million, roughly +0.3% YoY.
    
  • Supply has climbed ~32% YoY to 12,744 active listings, moving Vancouver into balanced-market territory (~15% sales-to-active-listings ratio).
    
• Ottawa:
  
  • Sales are down 10.2% YoY, yet average prices are up 1.4% YoY at about $669,945.
    
  • New listings rose 5%, driving a 61% YoY jump in active listings.
    
  • Inventory reached 4.6 months, pivoting from a prior seller’s market to a more balanced environment.
    
• Calgary:
  
  • Sales dipped 19.3% YoY but remain near long-term averages; inventory surged 75% vs. last year.
    
  • The benchmark price in February 2025 sits at $587,600, +1% YoY, with detached homes averaging $681k (+6.7%).
    
  • Immigration and a rebounding energy sector continue to support demand, preventing a steep price drop.
    
• Halifax (Atlantic Canada):
  
  • One of the few major markets where sales actually rose (up 1.5% YoY).
    
  • The average home price reached $590,786, which is up 5.2% YoY.
    
  • Inventory remains low (~3.1 months), sustaining a seller’s market despite broader national uncertainty.
    
• Indirect Impacts (Inflation, Interest Rates, Construction):
  
  • The Bank of Canada has cut rates six times since mid-2024, bringing 5-year fixed mortgage rates down to ~4.5–5% from ~5.5–6%.
    
  • However, tariffs could re-ignite inflation (via higher import costs and a weaker Canadian dollar), forcing the Bank to slow or pause future rate cuts.
    
  • Construction costs remain elevated (+3.7% YoY by late 2024), and housing starts may cool if tariff tensions persist, especially in condo-heavy regions.
    
• Overall Market Outlook:
  
  • Sales trends and listing activity indicate a more balanced market in large parts of Canada as of early 2025.
    
  • Quickly resolving the tariff dispute could boost confidence and restore market momentum.
    
  • Prolonged tariffs raise the risk of higher inflation, job losses, and reduced construction — factors that could deepen the cooldown or trigger sharper price declines.
    
  • Fundamentals like population growth (immigration, interprovincial migration) and gradually improving affordability (lower rates) may continue to prop up demand, especially in relatively cheaper regions like Calgary and Halifax.

National Trends: Tariffs Cool a Rebounding Market

In the wake of Donald Trump’s 2024 re-election, a new round of U.S. trade tariffs has clouded Canada’s once-rebounding housing market. Beginning in early 2025, the Trump administration threatened steep tariffs on all imports from Canada, which economists warned could tip Canada into recession if sustained​ (1). This looming trade war has introduced significant uncertainty for homebuyers, sellers, and builders alike. 

Below, we analyze how these tariffs – and the economic turbulence they unleashed – have impacted national and regional trends in Canadian real estate from 2024 into 2025. We’ll dive into key data on prices, sales, inventory, and construction and explore indirect effects such as inflation, interest rates, and building costs.

Entering 2025, Canada’s housing market showed signs of a modest rebound following the high-rate environment of 2023 and early 2024. However, new tariffs announced by the Trump administration introduced widespread concern among buyers and sellers, causing a notable slowdown in the first quarter of 2025. Analysts link a dip in home sales and price growth to mounting uncertainty about trade and its ripple effects on the broader economy. 

In this section, we break down the most recent data on nationwide sales, inventory, and prices. We also discuss how economic indicators, including mortgage rates and buyer sentiment, are shifting under the weight of new trade tensions.

Sales Slump

After a strong finish to 2024, Canadian home sales have pulled back sharply in 2025. February 2025 saw national home sales drop 10.4% year-over-year​ and 9.8% month-to-month, hitting their lowest level since late 2023​ (2). This marked a sudden reversal from late 2024, when sales were up ~19% year-over-year in December amid improving conditions​.

Canadian Home Sales in Early 2025

Prices Pause or Dip 

Average home prices have stagnated or declined modestly under the new uncertainty. The MLS® Home Price Index fell 0.8% month-over-month in February and is now 1% lower than a year ago​. The national average sale price (all property types) was about $668,000 in Feb 2025 – down 3.3% from February 2024​. Price growth picked up in late 2024, but tariffs have already “renewed price softness”, especially in previously hot regions like Southern Ontario​ (2).

Canadian Home Prices in February 2025

Surging Supply

Many sellers have rushed to list homes, even as buyers grow cautious. New listings spiked in January and plunged 12.7% in February (seasonally adjusted) as the initial rush abated​. Active inventory, however, is up 13% compared to a year earlier​. By the end of February, there were roughly 146,000 listings on the market nationally – the highest February inventory in almost a decade​. This equates to about 4.7 months of supply, up from 4.1 in January and nearing the long-term norm (~5 months)​. In short, the market has swung from tight to balanced territory within weeks​ (2).

Chilled Confidence

Industry experts tie the cooldown directly to tariff fears. The Canadian Real Estate Association (CREA) noted that home sales were down in late January, exactly when Trump’s tariff plans were announced​ (2). “The moment tariffs were first announced on January 20, a gap opened between home sales this year and last,” said CREA’s Senior Economist, with February’s drop in activity “hardly surprising” as buyers moved to the sidelines​ (2). 

Likewise, realtors report that economic jitters are causing many would-be buyers to adopt a “wait-and-see” approach​ (4). As one mortgage expert said, “When you can’t plan for the next six months, it’s really hard to take on a 25-year mortgage.”​ The usual spring surge of buyers has been delayed – or, as some describe it, “dead on arrival” absent more clarity (3)​.

Despite these headwinds, it’s worth noting that the downturn comes on the heels of a solid recovery in 2024. National sales for full-year 2024 were up 7.3% from 2023​, and prices had begun rising again amid lower interest rates (10). That momentum, however, is being tested by the tariff shock. Buyers now have more choice and negotiating power in 2025, but many are proceeding cautiously. 

The sales-to-new-listings ratio sits around 50% (up from 48% in January)​, firmly indicating a balanced market. If trade tensions ease and borrowing costs continue to fall, pent-up demand could still drive a rebound later in the year. For now, though, Canada’s housing market has shifted into a lower gear across most regions.

Regional Breakdown: Tariff Effects Across Major Cities

While the tariff-induced chill can be felt coast to coast, its impact varies by city. Below, we break down the latest trends in five key markets – Toronto, Vancouver, Ottawa, Calgary, and Halifax – highlighting how prices, sales, and inventory have shifted between 2024 and early 2025.

Toronto: GTA Buyers Retreat Amid Uncertainty

Toronto, Canada’s largest metropolitan area, tends to feel national economic ripples more strongly and more quickly than other regions. Following news of renewed U.S. tariffs, buyer sentiment here cooled at a faster rate, prompting a swift shift from a seller’s market to one more balanced — if not favoring buyers. Inventory levels spiked even as sales dropped, marking a notable contrast to the fiercely competitive market in 2022 and early 2023. Below, we dissect the sales data, price changes, and factors driving this sudden slowdown. While the rebound might return if tariffs ease, Toronto’s experience reveals how quickly policy shifts can upset local real estate dynamics.

Sales & Listings

The Greater Toronto Area (GTA) has seen one of the sharpest pullbacks. Home sales plunged 27% year-over-year in February, with only ~4,037 units sold via the MLS®, down from over 5,500 a year earlier​. At the same time, new listings rose 5.4% year-over-year​, leaving the market much better supplied than a year ago.

GTA Housing Market Snapshot – February 2025

Prices 

GTA home prices have softened but not collapsed. The average selling price in Feb 2025 was $1.084 million, down 2.2% from Feb 2024​. (By comparison, prices were still 4% higher than two months prior, as the market had upticked late in 2024) Toronto’s MLS® benchmark Home Price Index is down ~1.8% year-over-year​ (4). Homes are taking longer to sell, and bidding wars have become less common this spring.

GTA Home Prices – February 2025 Market Snapshot

Inventory

Active listings across the GTA are up dramatically from last winter. Inventory in February hit a 10-year high for the month​. The sales-to-new-listings ratio is languishing around 33% in the GTA (vs. ~60% a year ago), indicating a firm buyer’s market in Toronto’s suburbs and city​. Months of inventory have roughly doubled from last year, giving buyers breathing room that was unheard of during the frenzied pandemic market.

Market Dynamics

The uncertainty around trade and the economy is acutely felt in Toronto, Canada’s financial hub. High mortgage rates (though easing) and job security worries have sidelined many purchasers. “Many households in the GTA are eager to buy, but current mortgage rates make it difficult, and uncertainty about our trade relationship with the U.S. has likely prompted some to take a wait-and-see attitude,” said the Toronto Regional Real Estate Board’s chief analyst​ (4). Indeed, the ripple effects of tariffs – from volatile stock markets to whispers of layoffs – have dented consumer confidence in the GTA. 

The result is that even though borrowing costs are slowly improving, buyer sentiment is lukewarm. Sellers are having to price more realistically and expect longer sale times. On a positive note, if the Bank of Canada continues cutting rates and a trade truce emerges, Toronto could see a surge of pent-up demand later in 2025. For now, though, Trump’s tariffs have put the Toronto housing market into a holding pattern.

Vancouver: Balanced Market Holds Firm

Vancouver has long been known for its high prices and limited land supply. As the tariff situation unfolds, the city’s market has become more balanced — driven by increased available listings and cautious buyer behavior. Despite the pullback in sales, prices have held steady or even inched upward, underscoring Vancouver’s unique demand drivers, including global interest and ongoing immigration. In this subsection, we break down the interplay of new listings, buyer sentiment, and economic factors shaping the Metro Vancouver real estate scene. We also look at the benchmark price data for houses and condos as indicators of local resilience.

Sales & Listings

Vancouver’s housing market, which was already moderating in 2023, has shifted further into balanced territory. Home sales in Metro Vancouver totaled 1,827 in February 2025, down 11.7% from a year earlier​ and nearly 29% below the 10-year average for that month​. Meanwhile, new listings jumped 10.9% year-over-year as more sellers decided to test the market​. Active listings have swelled to 12,744 units, 32% higher than a year ago and the most since pre-pandemic times​. With supply rising and sales slowing, Vancouver’s sales-to-active listings ratio sits around 15% overall (under 11% for detached homes)​ – right on the edge of buyer’s market territory (typically <12%).

Metro Vancouver Home Sales – February 2025 Snapshot

Prices

Despite softer sales, prices in Vancouver have remained relatively flat so far. The MLS® HPI composite benchmark for all residential property in Metro Vancouver was $1,185,100 in Feb 2025, actually +0.3% higher than February 2024​. On a monthly basis, prices increased (+0.9% from Jan) as the market absorbed January’s listing surge​. Drilling down, detached house benchmarks are up ~2.8% year-over-year (to about $2.03M), while condo apartment benchmarks are down ~1.2% year-over-year (around $760k). 

Metro Vancouver Home Prices – February 2025 Benchmark +0.3%

In other words, higher-end segments have held up, while entry-level condos have seen minor price declines. Overall, Vancouver home values are roughly stable, a testament to the city’s persistent demand and limited land supply.

Market Dynamics

Metro Vancouver entered 2025 with an unusually large inventory build-up – the “largest selection of homes on the market since pre-pandemic times” – after a rush of listings in January​. However, buyers have been selective, and many are content to shop around, given no fear of rising prices in the short term. Robust tech and immigration trends somewhat insulate the local economy, but BC’s export sectors (forestry, etc.) are vulnerable to U.S. tariffs, creating a drag on confidence. Realtors describe current conditions as a welcome break from volatility: “Balanced market conditions typically bring a flatter price trajectory, and we’ve seen prices remain in a holding pattern for the past few months,” notes the Greater Vancouver real estate board​ (12). 

Indeed, market balance is the theme – the frenzy of 2021 is long gone, and now, buyers and sellers are evenly matched. With mortgage rates easing slightly, some sidelined Vancouver buyers are taking advantage of the improved conditions (February’s sales were up ~17% from January)​ (13). If tariff tensions worsen, though, Vancouver’s job market and consumer sentiment could take a hit, potentially tipping the market entirely in favor of buyers. For now, prices are steady, and well-balanced supply and demand have kept Vancouver real estate resilient in the face of trade uncertainty.

Ottawa: Stable Prices Amid a Surge in Supply

Canada’s capital typically sees less dramatic real estate swings, thanks to a strong government employment base. That trend largely continues into 2025, despite new tariffs creating economic uncertainty at a national level. While Ottawa’s sales activity dipped, inventory soared, giving buyers a wider range of options. Yet, prices remain surprisingly stable, with single-family homes leading in moderate year-over-year gains. Below, we explore the data behind Ottawa’s transition from a tight seller’s market to a more balanced — and potentially more sustainable — environment.

Sales & Listings

Canada’s capital region has experienced a moderate dip in sales, accompanied by a flood of new supply. The Ottawa Real Estate Board (OREB) reported 809 residential sales in February 2025, a 10.2% decline from February 2024​. Sales volumes were well below Ottawa’s 5- and 10-year averages for February​. On the flip side, new listings jumped ~5% year-over-year to 1,668 and were above historical averages​. This ongoing listing surge (a trend in late 2024) pushed active listings up 61% year-over-year to 3,735 homes on the market​. Months of inventory in Ottawa more than doubled from 2.6 a year ago to roughly 4.6 months as of February​ – a dramatic loosening of market conditions in just 12 months.

Ottawa’s Inventory Surge

Prices

Despite softer sales, prices in Ottawa have held their ground. The average sale price for residential properties was $669,945 in Feb 2025, basically flat from January and up 1.4% compared to a year earlier​. Ottawa’s MLS® Composite Benchmark Price sits around $658,300 – +4.4% year-over-year​. In other words, home values in Ottawa are slightly higher than last year at this time, even as buyer demand has cooled. Single-family homes lead the way (benchmark +1.3% YoY), while condo/townhome segments have lagged (townhouse benchmark -11.6 % YoY)​. With more supply in the market, price growth has definitely leveled off from the rapid gains seen in 2020-2022, but there’s been no significant decline in Ottawa’s prices so far.

Ottawa Home Prices – February 2025 Market Snapshot 

Market Dynamics

Ottawa’s housing market is traditionally steadier than Toronto or Vancouver, thanks to a large government employment base. That pattern seems to hold – even amid tariff turmoil, Ottawa’s prices are stable, and the market is gradually normalizing. OREB’s president noted that “sales activity moderated while prices held steady” in early 2025​. Buyers have more options now, and sellers face more competition, but core demand for homes remains present. 

Notably, Ottawa’s listing surge may partly reflect people who delayed selling during the height of rate hikes now deciding to list. “Despite increased inventory, market uncertainty continues to influence buyer and seller decisions,” the OREB president said, citing factors like the Bank of Canada’s moves, “ongoing economic factors like tariffs,” and upcoming elections as weighing on sentiment​ (5). Indeed, some Ottawa sellers waiting for a hot spring market are discovering that 2025’s spring will be more buyer-friendly. Homes are still selling – especially well-priced, mid-range family homes – but the pace is more cautious. 

Overall, Ottawa’s market has shifted from a seller’s market to a balanced one in the past year. Tariff fears haven’t knocked prices down, but they have contributed to this more tentative mood. The capital’s housing sector appears to be riding out the uncertainty relatively well so far.

Calgary: From Boom to Balanced, But Prices Up

Calgary’s housing market has been on a tear for the past two years, supported by interprovincial migration and a rebound in the energy sector. Although introducing tariffs has cooled some investor enthusiasm, the city’s relatively low home prices and strong job growth continue to attract new residents. Inventory levels are finally beginning to rise after a prolonged shortage, offering buyers more choice than they’ve had in years. 

Here, we examine how these changes have affected sales, price benchmarks, and the pace of construction, starting in Alberta’s largest city. We also note potential future shifts if tariffs weaken economic momentum.

Sales & Inventory

Calgary’s housing market is coming off a two-year streak of booming sales and price gains, driven by interprovincial migration and a strong energy sector. By early 2025, that momentum has eased. The Calgary Real Estate Board (CREB) says 1,721 homes sold in February, a 19.3% drop from the torrid sales of Feb 2024 (2,132 sales)​. It’s a notable cooldown, though sales remain at or above long-term norms for February​. 

Calgary Housing Market – February Sales: 2024 vs. 2025

At the same time, Calgary is seeing a surge in listings: 2,830 new listings hit the market in February, up 4.4% year-over-year​. This pushed the total inventory to 4,145 active listings, a massive 75% jump vs. last year​. It’s the second straight month of inventory doubling year-on-year, as Calgary’s previously tight supply conditions finally loosen​. The sales-to-new-listings ratio in Calgary is now around 61%, down from the extreme seller’s market levels (>80%) seen last year – a sign that balance is returning.

Prices

Notably, Calgary’s prices are rising year-over-year, bucking the national softening trend. The benchmark price for a typical home reached $587,600 in February, about 1% higher than in February 2024​. Average prices are up even more: the average detached house sold for ~$681,000 (+6.7% YoY), and the average townhouse for ~$455,000 (+5.1% YoY) as of early 2025​. Calgary’s home values hit record highs in 2024, and they’ve essentially plateaued near those highs rather than fallen. 

However, the pace of appreciation has slowed – a year ago, Calgary was seeing double-digit annual price growth. With inventory now building, price growth has decelerated to the low single digits. The CREB noted that the once red-hot seller’s market of the past few years is “easing off, causing the pace of price growth to slow down.”​ (6)

Market Dynamics

Calgary’s housing fortunes have been relatively robust thanks to strong immigration (people moving from other provinces for affordable housing and jobs) and an improving energy sector in 2022-24. Those factors cushioned the impact of higher interest rates on demand. Even now, market conditions are healthy: months of inventory remain low (~2.4 months), and the market is just entering balanced territory. But the data shows a clear inflection: buyers have more choice and slightly more leverage than last year, especially in condos and entry-level homes where listings have surged. 

Much of the new inventory has been in apartment condos and townhomes under $500k, segments that investors had scooped up during the boom​. As higher rates and economic jitters set in, more units hit the market, easing the crunch for affordable options. Calgary’s economy could be indirectly hit by Trump’s tariffs if a broader North American slowdown occurs (and oil prices could be impacted by global trade tensions). 

For now, though, Calgary remains one of the more resilient markets in Canada, with reasonable affordability and ongoing population growth sustaining sales. The city has shifted from an extreme seller’s market to a more balanced posture, but so far, tariffs have only tapped the brakes, not slammed them – Calgary’s prices are holding up modestly above last year’s levels, a rare feat in 2025 (6).

Halifax: Resilient Atlantic Market Defies the Trend

Halifax and the broader Atlantic region have been a bright spot in Canada’s housing landscape, showing robust sales even as tariffs cast uncertainty nationwide. In 2025, the city’s real estate market saw year-over-year price gains, and inventory levels remained comparatively low. While broader market jitters have made some investors pause, local demand for both detached homes and rental units persists, fueled by ongoing population growth. 

Below, we delve into the specifics of sales figures, price fluctuations, and how Halifax’s relative affordability keeps it buoyant. As you’ll see, this region stands out as one of the most resilient in the face of new trade barriers.

Sales & Inventory

Halifax and much of Atlantic Canada have so far weathered the tariff turmoil relatively well. In February 2025, 339 homes were sold in the Halifax region, actually +1.5% more than a year ago (and a hefty +17% vs. two years ago)​. Buyer activity picked up from January as the spring approached, reflecting that demand remains strong. On the supply side, 464 new listings came on the market in February, 11% higher than last year​. Active listings stood at around 1,052, up a modest 7.6% year-over-year​. That inventory is still relatively low in absolute terms (for a metro of 0.5 million people). 

Halifax Real Estate – February 2025 Market Snapshot

It gives Halifax only 3.1 months of inventory – slightly more than last year, but still indicative of a seller’s market (Halifax’s SNLR was 73% in Feb, far above the ~50% national average)​. In short, Halifax’s market remains tighter than most other cities, with sales keeping pace with the increased listings.

Prices

Home prices in Halifax continue on an upward trajectory. The average sale price in Feb 2025 was $590,786, up 5.2% year-over-year​. The median price saw a similar ~5.6% YoY increase to $565,000​. Halifax’s prices have more than doubled over the past decade​, and unlike Toronto/Vancouver, they haven’t seen any annual decline through the recent interest rate cycle. Even monthly, Halifax’s average price in February was only a couple percent below the record high set in January. By segment, there is a split: single-family homes (which dominate Halifax’s market) are still surging – average detached price ~$633k, +8.5% YoY​ – whereas condo apartments have seen prices drop (avg ~$462k, –11% YoY) as a wave of new condos hit the market. Overall, though, the typical Halifax homeowner has gained value in the past year, tariffs or not.

Market Dynamics

Halifax’s relative strength comes from its affordability and demographic tailwinds. The city attracted many new residents during the pandemic (remote workers and returnees) and still has housing prices far below big-city levels, which insulates it from some higher-rate pressures. Local demand is solid, as evidenced by Halifax posting positive year-over-year sales, one of the few major markets to do so​. 

Realtors report that correctly priced listings are still drawing multiple offers in Halifax’s more desirable neighborhoods, starkly contrasting the cautious tone in bigger markets. That said, even in Atlantic Canada, there is caution about the broader economy. Talk of tariffs and recession has some impact – for instance, investment buyers have become more hesitant, which may explain the softer condo segment. And the increase in listings suggests some sellers want to “cash out” near peak prices in case the market turns. 

But so far, Eastern Canada’s housing markets remain pretty robust. The Halifax market is still classified as a seller’s market with an SNLR above 70%​, and prices are up a healthy mid-single-digit year-over-year. Unless tariffs significantly derail Canada’s employment or migration trends, Halifax is poised to continue outperforming with modest growth in 2025.

Indirect Impacts: Inflation, Interest Rates, and Construction

Beyond the direct effects on buyer psychology and market balance, Trump’s tariffs are exerting indirect influences on Canada’s economic landscape – and, by extension, the housing market. These include pressure on inflation (via prices of goods and materials), shifts in interest rate policy, and cost challenges in construction.

Monetary Easing vs. Inflation Risks

Coming into 2025, Canada’s inflation had finally receded to around 2%, allowing the Bank of Canada (BoC) to reverse course and cut interest rates through late 2024​ (3). In fact, the BoC delivered six straight rate cuts from mid-2024 into early 2025​ after holding rates at high levels the year prior. This brought the overnight rate down from its ~4.5% peak to roughly the mid-3% range by Q1 2025, translating into some relief in mortgage rates. (Typical 5-year fixed mortgage rates, which were ~5.5–6% in 2023, have fallen closer to ~4.5–5% in early 2025, improving affordability modestly.) 

However, the tariff conflict introduces a thorny dilemma: Tariffs are inherently inflationary – a broad 25% tariff on Canadian exports could weaken the Canadian dollar and raise import prices, pushing up inflation, even as it cools growth. Policymakers are wary that supply-chain disruptions and a weaker loonie will lead to higher costs for consumers and builders. The BoC has signaled it will monitor the situation; if a trade war drives up prices (e.g. for food, vehicles, building materials), it might slow or pause rate cuts despite a slowing economy. So far, core inflation remains near target, but the risk of “stagflation” – rising inflation with slowing growth – is a dark cloud on the horizon due to the tariffs​. 

For housing, this means uncertainty in the interest rate outlook: homebuyers anticipate that rates may continue to fall, but that is contingent on inflation staying under control. Any sign that tariffs are spiking inflation could keep borrowing costs higher for longer, weighing on housing demand. This tug-of-war between stimulus (rate cuts) and restraint (inflation fears) is another way the tariff dispute hovers over Canada’s real estate market.

Construction Costs and New Builds

The tariffs also impact the housing supply side. Building a home in Canada has become more expensive in recent years due to labor shortages and global supply-chain issues. By Q4 2024, residential construction costs were about 3.7% higher year-over-year, outpacing general inflation. Now, trade tensions threaten to exacerbate some cost pressures while easing others. 

For example, U.S. tariffs on Canadian steel and aluminum (or retaliatory Canadian tariffs on U.S. materials) could increase domestic construction costs for high-rise condos and infrastructure. Conversely, tariffs on Canadian lumber exports might flood the local market with lumber, potentially lowering lumber prices for Canadian builders – a silver lining for construction. On balance, though, developers are reporting plenty of headwinds: skilled labor costs are rising, financing is tighter with higher interest rates, and uncertainty about the economy is making them cautious​ (8). The Canadian Home Builders’ Association notes that volatility in material costs (steel, lumber, appliances) adds risk premiums to projects.

Housing starts saw a brief uptick in early 2025 – the annualized pace of starts in January was ~229k, a 3% increase from the previous month​ – and urban starts were up 7% year-over-year as builders moved to meet strong end-of-2024 demand. However, experts warn that this momentum may not last. “Foreign trade risks add significant uncertainty for housing construction going forward,” CMHC’s deputy chief economist cautioned​. In its 2025 outlook, CMHC projects housing starts will decline through 2025–2027 (though remaining above long-term averages)​. 

The expected pullback is most pronounced in condo-heavy markets: Higher interest rates and tariff fears weaken investor demand for new condo projects in Ontario and B.C., leading to fewer pre-sales and project launches. Developers in Toronto and Vancouver have struggled with slower condo sales and are postponing some new towers – a trend likely to worsen if tariffs dampen economic confidence further. In contrast, rental apartment construction has been a bright spot and is expected to stay strong in 2025, partly thanks to government incentives and severe rental housing shortages​. 

Regions like the Prairies and Quebec, which saw robust housing starts in 2024, might see activity cool somewhat (Alberta’s starts “will slow down from high levels,” says CMHC) ​yet remain relatively elevated as population growth there is still solid. Eastern cities like Montreal and Halifax that enjoyed a surge in building may face “quite weak” condo starts ahead, with builders focusing on cheaper ground-oriented homes and rentals instead​.

Overall, the tariff-induced uncertainty is causing builders to become more cautious, even as Canada still faces a housing supply shortfall. If the worst-case trade scenario unfolds – e.g., a sustained 25% U.S. tariff on all Canadian imports – it could deal a significant blow to housing construction. CMHC warns that such a scenario would entail “a weaker Canadian dollar, lower export revenues, job losses, higher inflation and a greater risk of recession”​ (11). 

Those factors would likely curtail new housing development (fewer jobs and higher costs mean fewer buyers for new homes). In short, tariffs threaten to cool the pipeline of new homes, which in the long run could keep Canada’s housing supply constrained and prices from correcting too deeply. It’s an ironic dynamic: In the short term, trade turmoil is softening housing demand, but in the long term, it could also crimp supply, potentially setting the stage for tighter markets once the economy stabilizes.

Conclusion

From Toronto to Halifax, Canada’s housing market has shifted into a slower gear in the shadow of Trump’s post-2024 tariffs. What was poised to be a hot spring in 2025 has become a cautious, balanced market in many regions. Nationally, sales are down and inventory is up, yet average prices are only edging down gradually – a testament to the market’s resilience and the still-present fundamental demand for housing. Regions like the GTA and Vancouver have seen the most pronounced cooling, with buyers firmly in control for the first time in years. At the same time, more affordable markets like Calgary and Halifax remain buoyant by comparison.

The coming months will be crucial. Much depends on whether trade tensions escalate or ease. A swift resolution to the U.S.-Canada tariff dispute could revive consumer confidence, unleash demand, and bolster economic growth – translating to a pickup in home sales and a return to modest price gains later in 2025. Conversely, a protracted trade war (especially if U.S. tariffs are fully implemented) would pose downside risks: higher costs, job losses, and possibly a broader recession that would test the housing market’s stability more severely. Policymakers and forecasters are already gaming out scenarios – from best-case to worst-case – given the outsized impact a 25% tariff on all Canadian exports would have on the economy​.

For now, Canada’s housing market in 2024-2025 can be characterized as entering a holding pattern: neither crashing nor booming. Low unemployment and ongoing population growth (from immigration and migration) provide an underlying floor for housing demand. Meanwhile, the combination of lower interest rates and slower price growth in 2025 has improved affordability slightly for buyers who remain in the market. This could sow the seeds of a future rebound. One industry outlook noted, “Some households will see improved buying power, boosting housing activity in the short term,” despite the headwinds​ (11). Indeed, if borrowing costs keep falling through 2025, we may see portions of sidelined demand trickle back, tariffs or not.

In summary, Trump’s tariffs have unquestionably cooled the Canadian housing sector’s momentum – especially by denting sentiment in major markets – but they have not (at least not yet) caused any drastic price collapses. The impact is visible in softer sales and rising listings rather than dramatic price swings. Buyers are negotiating harder and can be picky, while sellers are adjusting expectations. Builders are more wary, yet Canada’s housing needs remain acute. All eyes will be on the trade negotiations and the Bank of Canada’s next moves. 

Canada’s housing market is proving resilient, but it is not immune: if trade tensions worsen, the cumulative effects (on jobs, confidence, and costs) will deepen, and the housing market’s soft landing could yet become a harder one. Conversely, resolving the tariff conflict would remove a major “dark cloud”​ hanging over the market, potentially setting the stage for a resurgence in activity. For the time being, 2025 is a year of transition and uncertainty for Canadian real estate – a year in which trade policy has become as important to watch as mortgage rates for anyone with a stake in housing.

References

1. Reuters – “Canadian home sales fall on uncertainty about US tariffs, says CREA.” February 18, 2025: https://www.reuters.com/world/americas/canadian-home-sales-fell-33-january-december-says-crea-2025-02-18/#:~:text=uncommon%20time%20of%20year%2C%20as,CREA%20senior%20economist%20Shaun%20Cathcart
   
2. Canadian Real Estate Association (CREA) – “Tariff Uncertainty Keeping Home Buyers on the Sidelines.” News Release, March 17, 2025: https://www.crea.ca/media-hub/news/tariff-uncertainty-keeping-home-buyers-on-the-sidelines/#:~:text=,3
   
3. Global News – “Is Canada’s spring housing market ‘dead on arrival’ amid tariffs?” March 18, 2025: https://globalnews.ca/news/11085333/canada-spring-housing-market-tariffs/#:~:text=as%20U
   
4. Toronto Regional Real Estate Board (TRREB) – Market Watch – February 2025. March 5, 2025: https://trreb.ca/wp-content/files/market-stats/market-watch/mw2502.pdf#:~:text=compared%20to%20January%202025,edged%20lower%20after%20seasonal%20adjustment
   
5. Ottawa Business Journal – “Listings surge as sales drop in an uncertain residential housing market, OREB data shows.” March 17, 2025: https://obj.ca/listings-surge-sales-drop-residential-housing-market-oreb/#:~:text=The%20number%20of%20new%20listings,for%20the%20month%20of%20February
   
6. Canadian Press via Mortgage Trends – “Calgary home sales fall as supply continues to surge…” March 3, 2025: https://www.canadianmortgagetrends.com/2025/03/calgary-home-sales-fall-as-supply-continues-to-surge-especially-for-affordable-units/#:~:text=The%20Calgary%20Real%20Estate%20Board,levels%20continued%20to%20grow%20substantially
   
7. WOWA.ca – “Halifax Housing Market Report: March 10, 2025 Update.” (Halifax average prices and sales stats)​: https://wowa.ca/halifax-housing-market#:~:text=Average%20and%20Median%20Home%20Prices
   
8. Statistics Canada – “Building construction price indexes, Q4 2024.” Released Feb 4, 2025: https://www150.statcan.gc.ca/n1/daily-quotidien/250204/dq250204b-eng.htm#:~:text=In%20the%20fourth%20quarter%2C%20residential,growth%20in%20residential%20construction%20costs
   
9. CMHC / Benefits and Pensions Monitor – “Housing starts rise in early 2025, but trade risks… add uncertainty.” March 2025: https://www150.statcan.gc.ca/n1/daily-quotidien/250204/dq250204b-eng.htm#:~:text=In%20the%20fourth%20quarter%2C%20residential,growth%20in%20residential%20construction%20costs
   
10. Zoocasa – “Improved Year-End Sales and Listings Point to a Busy Spring 2025: CREA.” January 15, 2025: https://www.zoocasa.com/blog/crea-december-2024/#:~:text=The%202024%20real%20estate%20market,the%20Canadian%20Real%20Estate%20Association
    
11. https://www.benefitsandpensionsmonitor.com/news/industry-news/housing-starts-rise-in-early-2025-but-trade-risks-and-slowing-immigration-add-uncertainty/391349#:~:text=%E2%80%9CSlower%20population%20growth%20and%20economic,%E2%80%9D
    
12. https://www.gvrealtors.ca/market-watch/monthly-market-report/february-2025.html#:~:text=,pandemic%20times
    
13. https://wowa.ca/reports/canada-housing-market#:~:text=British%20Columbia