Looking to buy a house in Canada amid trade war? What RBC report is telling us about the real estate market
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The ongoing trade war between the U.S. and Canada has cooled Canadian housing markets significantly. Anxiety over tariff uncertainty and a looming threat of recession have led to notable shifts in market activity and home prices across the country, according to a recently released special report on housing from RBC.
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Home resales have dropped sharply, with March 2025 marking the third consecutive monthly decline. Nationally, resales were down an estimated 4 per cent from February and 15 per cent from December. In major markets like Toronto, resales in March were the lowest since 1998, dropping more than 30 per cent since the U.S. began its trade overhaul. In Vancouver, home resales have fallen 23 per cent year-to-date, says RBC.
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The trade war has made potential buyers more reluctant due to concern about job security and the broader economy. Many are choosing to wait out the uncertainty, rather than make the significant financial commitment to buy a home.
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Despite that shift, new listings have increased. Toronto's listings are up 8.1 per cent, while sales in that market have dropped 23.3 per cent. This imbalance has led to increasing inventory and more competition among sellers.
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In Toronto, the composite MLS Home Price Index fell by $35,000 (-3.2 per cent) over three months, with further declines expected. Vancouver's benchmark price has also slipped for three straight months and is now 0.6 per cent below its level from a year ago. Nationally, prices are expected to continue softening, especially in Ontario and British Columbia, according to BNN Bloomberg.
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The regions in Canada most vulnerable to the trade war's effects on housing are those with economies heavily tied to cross-border trade, especially sectors targeted by U.S. tariffs.
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The impact is most pronounced in southern Ontario, such as the cities of Toronto, Hamilton, Kitchener-Waterloo, Cambridge, Windsor, Brantford, Guelph, St. Catharines and Niagara Falls. The economies of these cities are deeply integrated with the U.S. via the automotive, steel, and manufacturing industries.
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The most intense retreats in housing activity and prices have been there, with Toronto experiencing its weakest sales in decades and other cities like Hamilton and Kitchener-Waterloo seeing notable price declines and surging inventories.
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Calgary is a major energy and beef exporter, making it highly exposed to U.S. tariffs on these commodities. The city has seen a significant rise in listings and a drop in sales, with prices flattening and market balance shifting as a result of weaker demand.
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