February home sales fell 9.8 percent as buyers hesitated amid tariffs, driving prices lower in key regions
According to the Canadian Real Estate Association (CREA), buyers hesitated amid the ongoing trade war with the United States, causing Canadian home sales to drop significantly in February 2025.
Sales activity recorded through Canadian MLS Systems declined 9.8 percent month-over-month, reaching the lowest level since November 2023.
This also marked the largest month-over-month decrease since May 2022.
CREA’s senior economist, Shaun Cathcart, stated, “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.”
He added that this shift is already contributing to renewed price softness, particularly in Ontario’s Greater Golden Horseshoe region.
Sales fell in approximately three-quarters of all local markets, with the sharpest declines in the Greater Toronto Area and surrounding regions.
The number of newly listed properties also dropped 12.7 percent month-over-month, erasing the surge recorded in January.
Market indicators reflect broad-based slowdown
- National home sales declined 9.8 percent month-over-month.
- Actual (not seasonally adjusted) sales activity was 10.4 percent lower than February 2024.
- New listings fell 12.7 percent month-over-month.
- The MLS Home Price Index (HPI) decreased 0.8 percent from January and 1 percent year-over-year.
- The national average sale price declined 3.3 percent on a year-over-year basis.
Despite the declines, the sales-to-new listings ratio increased slightly to 49.9 percent from 48.3 percent in January, remaining within the long-term balanced market range of 45 to 65 percent.
The number of properties listed for sale reached 146,250, marking a 13.1 percent increase from a year earlier but still below the long-term average of 174,000 listings for this time of year.
“There were 4.7 months of inventory on a national basis at the end of February 2025, up from 4.1 months in January,” CREA reported.
The long-term average is five months, with markets typically considered in favour of sellers below 3.6 months and in favour of buyers above 6.5 months.
The National Composite MLS HPI dropped 0.8 percent from January to February, the largest decrease since December 2023. The decline was most pronounced in Ontario’s Greater Golden Horseshoe region.
On an annual basis, the non-seasonally adjusted index fell 1 percent from February 2024.
CREA Chair James Mabey noted, “The uncertainty of the last few weeks seems to be causing some buyers to think twice about big financial decisions right now. For others, a softer pricing environment and now lower interest rates will be a buying opportunity.”
