Canada Housing Market Cools Amid Economic Uncertainty and Falling Sales
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Canada's housing market has experienced a notable slowdown in early 2025, with home sales declining and prices softening across the country. In April, national home sales decreased by 0.1% from March and were down 9.8% year-over-year, according to the Canadian Real Estate Association (CREA). The Home Price Index fell by 1.2% month-over-month and 3.6% annually, while the national average selling price dropped 3.9% from the previous year, indicating a cooling market .
The downturn in housing activity has been attributed to several factors, including economic uncertainties stemming from trade tensions, particularly with the United States. In March, home sales experienced the weakest performance for the month since 2009, with a 4.8% decline from February and a 9.3% drop year-over-year. CREA's senior economist, Shaun Cathcart, noted that the uncertainty surrounding tariffs and broader economic concerns have led to reduced buyer confidence, prompting a more cautious approach to major financial decisions.
The slowdown in home sales is also impacting the construction sector, with a significant decline in pre-construction condominium sales. In major cities like Toronto, sales of one- and two-bedroom condos have reached record lows, primarily due to high mortgage costs and limited prospects for capital appreciation. This hesitation among investors and potential buyers is expected to delay new construction projects, exacerbating the existing supply-demand imbalance in the housing market.
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