Fall in prices and slower activity could present a solid buying window
Tariffs and trade woes are continuing to shroud the Canadian economy in uncertainty – and the country’s biggest housing markets are feeling the pinch as homebuyers flock to the sidelines.
The numbers paint their own picture. In the Greater Toronto Area (GTA), home sales plummeted by 23.3% last month compared with April 2024 as new listings surged, with detached homes, townhouses, and condos all seeing a huge drop-off in purchases.
Vancouver saw a similar slide, with overall sales plunging by 23.6% and total active listings skyrocketing by nearly 30%.
But while uncertainty and fear over what could be in store for the Canadian economy in the midst of a trade war appears to be giving borrowers cold feet, there’s no indication that the housing and mortgage markets are facing meltdown – because there’ll always be Canadians who need to buy a home, according to a Vancouver-based mortgage advisor.
“Whether there’s turmoil or not, life happens,” Karn Toor (pictured top), of BlueShore Financial, told Canadian Mortgage Professional. “People have families. People have kids. And naturally, you might need more space. So whether there is turmoil in the economy or not, some people naturally need to buy a house for their family. And they’re doing family planning.”
Long-term housing picture remains healthy
While the Ontario and British Columbia markets are “slumping” (Royal Bank of Canada’s words), other regions including the Prairies and Maritimes are faring better.
But the Canadian Real Estate Association (CREA) downgraded its overall forecast for 2025 national sales towards the end of April as tariffs continue to weigh down the economic outlook.
DBRS Morningstar, meanwhile, now believes the Canadian housing market’s recovery could be pushed into next year and 2027 thanks to the chaos arising from Trump’s trade war.
A growing sense of economic uncertainty is making homeownership feel increasingly out of reach for many Canadians, according to the latest BMO Real Financial Progress Index.https://t.co/0oRvffgvgu
— Canadian Mortgage Professional Magazine (@CMPmagazine) May 6, 2025
Nonetheless, Toor said the current turbulence doesn’t shift the reality that buying a home is still a solid and potentially lucrative investment in the long term.
“Go out 10 years or so,” he said. “If you’re buying in 2025 versus a market high in, let’s say, 2022, you’re not buying it at the highest level. You maybe have a slight discount right now. You could be in a situation where there would be short-term negative equity in your home depending on what happens with the market.
“But if you look at it in a long-term time horizon, it may be a good opportunity. And again – some people naturally need to upsize. They need a bigger home. So they need to do it anyway.”
Those are the client types who are still active in the current market, he added: buyers who need to upsize their home regardless of how well or poorly the economy is performing.
Cooler activity improves affordability outlook for scores of buyers
What’s more, prices are also on the wane in the country’s main markets. In Vancouver, the composite benchmark price ticked down by 1.8% in April compared to the same time last year – and Toronto’s benchmark slid 5.4% lower year over year, with the average selling price in the GTA down 4.1%.
That, too, is a boost to buyers who need to make their move now, according to Toor. “There are good opportunities,” he said. “If you look compared to a few years ago, the prices are coming down – maybe not substantially. But it depends on the client situation in this.”
Even though prices have dropped and both fixed and variable rates are down from the same time last year, plenty of buyers are still feeling the pinch when it comes to affordability, and Toor said it’s important for borrowers not to bite off more than they can chew with their mortgage.
Mapping out a financial strategy is as important as ever. “Talk to your advisor, your mortgage broker, plan out what your situation is, and see how these professionals can fit in and help,” he said. “And another one that’s especially important – especially right now – is see what you can truly afford. Just because you can borrow more doesn’t mean you necessarily need to.”
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