Canadian Existing-Home Sales Drop as Tariff Uncertainties Keep Potential Buyers Sidelined

On Monday, the Canadian Real Estate Association (CREA) reported that existing-home sales activity recorded over Canadian MLS® Systems declined 9.8% in February. This marks the lowest level for home sales since November 2023 and the largest month-over-month decline in activity since May 2022.

Declines were broad-based, with sales falling in about three-quarters of all local markets and in almost all large markets. The trend was most pronounced in the Greater Toronto Area and surrounding Great Golden Horseshoe regions.

New listings plunged 12.7%, returning all of the surprise surge recorded in January. There were 146,250 properties listed for sale on all Canadian MLS® Systems at the end of February, up 13.1% from a year earlier but still below the long-term average for that time of the year of around 174,000 listings.

With sales and new listings both down by similar magnitudes in February, the national sales-to-new listings ratio edged up slightly to 49.9% compared to 48.3% in January. The long-term average for the national sales-to-new listings ratio is 55%, with readings between 45% and 65% generally consistent with balanced housing market conditions, CREA said.

There were 4.7 months of inventory on a national basis at the end of February, up sharply from 4.1 months at the end of January. The long-term average is five months of inventory. Based on one standard deviation above and below that long-term average, a seller’s market would be below 3.6 months and a buyer’s market would be above 6.5 months.

The National Composite MLS® Home Price Index (HPI) declined 0.8% in February, the largest month-over-month decrease since December 2023. The non-seasonally adjusted HPI was down 1% year-over-year.