Canadian home sales experienced a significant decline in February, marking the largest drop in nearly three years, as uncertainty surrounding the economy, exacerbated by the onset of a trade war, led potential buyers to hesitate, according to data released by the Canadian Real Estate Association on Monday.
Sales decreased by 9.8% in February compared to January, representing the steepest decline since May 2022, and were down 10.4% year-over-year.
“The recent uncertainty appears to be prompting some buyers to reconsider major financial commitments at this time,” stated James Mabey, Chair of CREA.
The Organisation for Economic Co-operation and Development projected on Monday that U.S. President Donald Trump’s tariff increases will negatively impact growth in Canada, Mexico, and the United States, while also contributing to rising inflation.
The industry’s Home Price Index saw a slight decrease of 0.8% month-over-month and a 1% decline on an annual basis, while the national average selling price fell by 3.3% compared to the previous year.
Additionally, data from the Canadian Mortgage and Housing Corporation, the national housing authority, indicated that housing starts dropped by 4% in February from the previous month, reaching a seasonally adjusted annualized rate of 229,030 units.
Economists had anticipated that housing starts would increase to 250,000.