The Canadian housing market saw a sharp decline in sales activity from January to February as ongoing trade tensions with the United States left buyers hesitant. According to the Canadian Real Estate Association (CREA), home sales recorded through MLS® Systems fell 9.8% month-over-month in February 2025, marking the steepest decline since May 2022. This drop brings sales activity to its lowest level since November 2023.
With the introduction of tariffs by the USA, the resulting economic uncertainties immediately slowed buyer activity. “The moment tariffs were first announced on January 20, a gap opened between home sales recorded this year and last. This trend continued to widen throughout February, leading to a significant, but hardly surprising, drop in monthly activity,” said Shaun Cathcart, CREA’s Senior Economist. “This is already being reflected in renewed price softness, particularly in Ontario’s Greater Golden Horseshoe region.”
The national average sale price of a home in February was $668,097, down 3.3% year-over-year, highlighting increasing affordability concerns and declining demand in key markets. New listings also dropped 12.7% month-over-month, reversing the surprise increase seen in January. This reduction in supply suggests many sellers are holding back, waiting for more stable market conditions.
Where Sales Are Falling and Rising During Economic Uncertainty
The most substantial price growth in February 2025 was seen in Saint John, where home prices surged by $99,490 (33.1%) year-over-year, rising from $300,598 to $400,088. This substantial increase highlights the city’s growing demand, particularly as buyers seek more affordable alternatives to larger markets.
Saguenay CMA also saw impressive gains, with prices increasing $58,412 (21.0%) from $277,994 to $336,406. Quebec CMA followed closely, with a $68,678 (17.8%) jump, bringing the average price to $453,570. Meanwhile, Saskatoon recorded a $60,656 (16.9%) increase, rising from $358,899 to $419,555. These significant price surges suggest strong buyer activity and increasing demand in more affordable markets, where lower price points continue to attract both investors and first-time buyers.
Conversely, some of Canada’s traditionally high-priced markets experienced notable declines, reflecting a potential shift in buyer preferences or affordability constraints. Greater Vancouver saw the largest price drop for average home prices month-over-month, declining $50,960 (-4.0%) from $1,278,513 to $1,227,553. At the same time, year-over-year sales fell by 11.9%, indicating cooling demand in one of the country’s most expensive regions.
Hamilton-Burlington also recorded a $28,448 (-3.4%) decrease, with prices falling from $841,996 to $813,548, suggesting that affordability concerns may be slowing transactions in the area. Home sales experienced a dramatic 23.1% drop from last year, further indicating a cooling market.
Windsor-Essex saw a $17,699 (-3.1%) decline, with prices dropping from $568,747 to $551,048, while Greater Toronto prices slipped by $23,930 (-2.2%) to $1,084,790, reflecting a modest softening in demand. These price decreases suggest that higher-priced markets are experiencing buyer hesitation, potentially due to economic conditions, interest rate impacts, or shifting preferences toward more affordable housing options in other regions.
Demand Continues to Increase in More Affordable Markets
In February, home prices in Canada’s best-performing real estate markets ranged from highly affordable to mid-range urban pricing, with several regions still offering homes under $350,000. The most budget-friendly options were found in Saguenay CMA ($336,406) and Newfoundland & Labrador ($309,844), both of which are 50 percent off the national average price of $668,097.
Despite its 21% price surge year-over-year, Saguenay’s average price remains under $350,000, making it an attractive option for buyers seeking affordability with room for appreciation. Similarly, Newfoundland & Labrador saw a surge in sales activity (up 21%) while its price remained nearly unchanged, reinforcing its position as a stable, entry-level market.
In the $350,000 to $450,000 range, Winnipeg ($408,052) and Trois Rivières CMA ($415,884) stand out as mid-priced markets offering strong investment potential. Winnipeg’s steady 11.0% price increase reflects a well-balanced market where buyers and sellers remain active. Trois Rivières, on the other hand, saw a 12.7% price jump, signaling growing buyer interest in Quebec’s more affordable alternatives.
Moving into the higher mid-range ($450,000 to $700,000), Quebec CMA ($453,570) and Montreal CMA ($655,915) are seeing continued demand, particularly among urban buyers. Quebec City’s 17.8% price increase makes it one of the most competitive markets in the country, while Montreal remains stable with a 7.1% increase, maintaining a healthy supply-demand balance. These price ranges highlight a clear affordability divide, where buyers priced out of major cities like Toronto and Vancouver are gravitating toward well-priced markets in Quebec, Winnipeg, and Atlantic Canada.
2025 May Be the Year of Opportunity for Buyers in Slower Markets
While sales have declined in traditionally expensive markets like Greater Toronto, Hamilton-Burlington, and Vancouver, this shift presents a unique opportunity for buyers. This is especially true for the condo market, which has seen increased inventory.
With reduced competition and softening prices, buyers may find themselves in a stronger negotiating position, securing better deals on properties that would have been out of reach in a more competitive market.
Additionally, those previously priced out may now have a chance to enter the market at a more favorable price point, especially with the potential for further price adjustments in the coming months. For those looking to invest in these major urban centers, the current slowdown could be the perfect moment to make a strategic purchase before the market rebounds.
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