As the trade war instigated by U.S. President Donald Trump continues to impact the global economy, Canada’s real estate market is experiencing unprecedented cooling. The latest data shows that not only have Canadian house prices been on the decline, but housing sales also plummeted in March, particularly in Alberta and Calgary, where rental prices have also seen the sharpest declines in the country. Real estate analysts and economists predict that the Canadian housing market will continue to face pressure in 2025, with even more challenges ahead this year.

Both Prices and Sales Drop: Canada’s Real Estate Winter

According to the Canadian Real Estate Association (CREA), in March 2025, national housing sales dropped 9.3% compared to the same month last year, and fell 4.8% from February. Compared to November 2024, sales plummeted by 20%. At the same time, the average house price also took a hit, dropping to 678,331 CAD, a 3.7% decrease from last year. This data marks a deep correction in the Canadian real estate market.

CREA’s senior economist Shaun Cathcart explained, “Earlier, the decline in sales was mainly due to uncertainty surrounding tariffs, but now the market has to directly face the real economic impacts of these policies. What we initially thought would be a strong rebound in 2025 now looks like it will be a flat market at best.”

Despite this gloomy outlook, CREA remains somewhat hopeful for 2026, predicting that national sales will increase by 2.9%, surpassing 496,000 units. However, this would still mark the fourth consecutive year the housing market fails to break the 500,000-unit barrier.

Calgary Rent Drops Drastically: The Fastest Decline in the Country

Similar to the housing market, the rental market has also been hit hard. According to Zumper’s latest report, Calgary’s rental prices saw the largest year-over-year drop in the country, with a 9.8% decrease. Kingston and Toronto followed with drops of 7.9% and 6.1%, respectively. This means Calgary’s rental prices are now ranked 15th in the country, with a noticeable difference compared to Edmonton, which ranks 21st with an average one-bedroom rent of just 1,300 CAD per month, down only 1.5% year-over-year.

Zumper’s report notes that Canada’s rental market has seen a dual decrease in both year-over-year and month-over-month figures for six consecutive months, indicating a cooling trend in the rental market. With increased supply and many renters choosing to stay put due to financial pressures, the downward trend in rents appears to be ongoing.

Uncertainty and Market Fatigue: What Lies Ahead for the Housing Market?

Amid global economic uncertainty and rising tariffs, Canada’s real estate market seems to be in a period of stagnation. According to TD Bank’s report, the national average house price is expected to drop by 3.2% in 2025, with a potential recovery of 4.8% in 2026. However, economists and real estate experts all point out that the underlying causes of this cooling, beyond tariffs, include factors such as global economic uncertainty, low consumer confidence, and high interest rates.

Clay Jarvis, a Canadian mortgage expert at NerdWallet, bluntly stated, “Although we all knew the housing market would be affected, a 20% drop since November of last year is still shocking.” He added, “April may be even worse, as the tariff situation is causing panic across many industries. The good news is that Trump recently announced the removal of some tariffs, which may encourage some buyers to return to the market before summer. Moreover, the current mortgage rates are still quite attractive, and people’s patience with these policies is limited. Once they tire of alarming headlines, they’ll likely continue buying homes, moving, and going about their lives.”

Looking Ahead: Cautiously Optimistic Future

Despite the current challenges facing the Canadian real estate market, some experts remain optimistic for a small recovery in 2026. TD Bank predicts that as tariff uncertainty gradually subsides, low interest rates persist, and the “pent-up demand” finally gets released, the market could see a rebound.

Nevertheless, the future remains uncertain. Whether Canada can overcome these external shocks and restore vitality to its real estate market is still an open question. For buyers, sellers, and investors observing the market, the current housing environment is undoubtedly challenging, but it also presents opportunities amidst the uncertainty.