Canada home prices likely to drop in 2025 as tariff uncertainty persists: TD
Canadian home prices should fall on average in 2025, with tariff uncertainty that muted the market in the first quarter unlikely to fade away, according to TD Economics' latest housing outlook.
The tariff threat, as well as severe winter storms, led to a double-digit quarterly decline in sales and a mid-single-digit quarterly drop in prices — 'much weaker' than forecast in December, TD economist Rishi Sondhi wrote in a report published Wednesday.
'This much-softer starting point has led us to materially mark down our 2025 annual average growth forecasts for Canadian home sales and prices,' Sondhi wrote. TD now forecasts a 3.2 per cent drop in average home prices this year, as well as a decline in sales of 0.9 per cent.
The tariff situation is seen as a key factor for the first quarter as well as the outlook ahead. Sondhi explicitly notes that the December forecast came prior to the January 20 inauguration of U.S. President Donald Trump. Trump's announcement of tariffs on that date was singled out as the 'moment' that sales began to plunge by the Canadian Real Estate Association, with February's month-over-month drop in sales the largest in nearly three years.
The dismal conditions do not seem to apply to the cottage market to the same degree, with a new Royal LePage report forecasting an increase in prices for single-family recreational homes across the country.
'While the mainstream market is more sensitive to economic shifts, demand in the recreational segment remains steadfast, even during periods of market hesitation," Phil Soper, president and CEO of Royal LePage, said in a statement.
Although 2025's first quarter for the broader market was particularly bad, Sondhi writes, 'elevated uncertainty and a deteriorating jobs market will yield subdued sales and price growth for much of 2025.'
TD's revised forecasts have the biggest cuts to expectations in British Columbia and Ontario, with average home prices expected to fall 4.1 per cent and 6.4 per cent, respectively, in 2025.
'This reflects muted demand conditions in both markets and supply/demand balances that are heavily skewed in favour of buyers,' Sondhi wrote. The condominium market in the Greater Toronto Area is 'particularly soft,' he points out, and should keep average prices down for the entire province.
Outside B.C., Ontario, and P.E.I. (where a one per cent drop in prices is forecast), TD still expects average prices to climb in 2025, though all provinces have had their price growth forecasts 'marked down,' Sondhi says. A tighter supply-and-demand relationship and 'comparatively better affordability' in Manitoba, Saskatchewan and Alberta mean quarterly price gains there should still 'outperform,' Sondhi adds.
TD expects 'a notable rebound' in both sales and prices in 2026, based on its most recent quarterly forecast, which assumes six months of heavy tariffs before negotiations lead to an improved trade situation. In that scenario, uncertainty would eventually wane and interest rates 'should be at multi-year lows,' Sondhi says. Average prices are expected to rise 4.8 per cent in 2026, with sales up 10.1 per cent, TD projects.
'These factors will facilitate the release of significant pent-up demand. However, the scale of bounce-back in Canadian average home prices will likely be restrained by poor affordability in key markets like B.C. and Ontario."
John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jmacf.
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Currency Exchange International Reports Second Quarter 2025 Results
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To participate in or listen to the call, please dial the appropriate number: Toll Free - North America: (+1) 800 717 1738 Conference ID Number: 21262 About Currency Exchange International, Corp. Currency Exchange International is in the business of providing comprehensive foreign exchange technology and processing services for banks, credit unions, businesses, and consumers in the United States and select clients globally. Primary products and services include the exchange of foreign currencies, wire transfer payments, Global EFTs, and foreign cheque clearing. Wholesale customers are served through its proprietary FX software applications delivered on its web-based interface, ('CXIFX'), its related APIs with core banking platforms, and through personal relationship managers. Consumers are served through Group-owned retail branches, agent retail branches, and its e-commerce platform, ('OnlineFX'). Contact Information For further information please contact: Bill MitoulasInvestor Relations(416) 479-9547Email: KEY PERFORMANCE AND NON-GAAP FINANCIAL MEASURES The Group measures and evaluates its performance, as presented in this document, using a number of financial metrics and measures, such as adjusted net income, which do not have standardized meanings under generally accepted accounting principles (GAAP) and may not be comparable to other companies. The Group's management believes that these measures are more reflective of its operating results and provide the readers of this document with a better understanding of management's perspective on the performance. These measures enhance the comparability of our financial performance for the current year with the corresponding period in the prior year. For further information, including a reconciliation, refer to key performance and non-GAAP financial measures in the MD&A. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION This press release includes forward-looking information within the meaning of applicable securities laws. This forward-looking information includes, or may be based upon, estimates, forecasts, and statements as to management's expectations with respect to, among other things, demand and market outlook for wholesale and retail foreign currency exchange products and services, future growth, the timing and scale of future business plans, results of operations, performance, and business prospects and opportunities. Forward-looking statements are identified by the use of terms and phrases such as 'anticipate', 'believe', 'could', 'estimate', 'expect', 'intend', 'may', 'plan', 'predict', 'preliminary', 'project', 'will', 'would', and similar terms and phrases, including references to assumptions. Forward-looking information is based on the opinions and estimates of management at the date such information is provided, and on information available to management at such time. Forward-looking information involves significant risks, uncertainties and assumptions that could cause the Group's actual results, performance, or achievements to differ materially from the results discussed or implied in such forward-looking information. Actual results may differ materially from results indicated in forward-looking information due to a number of factors including, without limitation, the competitive nature of the foreign exchange industry; evolving worldwide geopolitical developments and pandemics including COVID-19 all of which may continue to have a material adverse effect on global economic activity, and may continue to result in volatility and disruption to global supply chains, operations, mobility of people and the financial markets which impact personal and business travel, tourism and factors relevant to the Group's business; global economic deterioration negatively impacting tourism in general; currency exchange risks, the need for the Group to manage its planned growth, the effects of product development and the need for continued technological change, protection of the Group's proprietary rights, the effect of government regulation and compliance on the Group and the industry in which it operates, network security risks, the ability of the Group to maintain properly working systems, theft and risk of physical harm to personnel, reliance on key management personnel; volatile securities markets impacting security pricing in a manner unrelated to operating performance and impeding access to capital or increasing the cost of capital as well as the factors identified throughout this press release and in the section entitled 'Risks and Uncertainties' of the Group's Management's Discussion and Analysis for the three and six-month periods ended April 30, 2025 and 2024. Forward-looking information contained in this press release represents management's expectations as of the date hereof (or as of the date such information is otherwise stated to be presented) and is subject to change after such date. The Group disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws. The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this press release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained in this press release. 1 These are non-GAAP financial measures and ratios and are not standardized financial measures under IFRS, they are based on management-determined non-recurring items. For further information, refer to the key performance and non-GAAP financial measures section on page 4 of this document. 2 These are non-GAAP financial measures and ratios and are not standardized financial measures under IFRS, they are based on management-determined non-recurring items. For further information, refer to the key performance and non-GAAP financial measures section on page 4 of this document.3 These adjusted results are non-GAAP financial measures and ratios and are not standardized financial measures under IFRS, they are based on management-determined non-recurring items. For further information, refer to the key performance and non-GAAP financial measures section on page 4 of this in to access your portfolio
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