Canadian Existing Home Sales (February 2025)

Canadian housing market hit by snowstorms & tariff uncertainty in February 

• Canadian existing home sales plunged 9.8% month-on-month (m/m) in February, the largest monthly decline since May 2022 – near the beginning of the Bank of Canada's aggressive interest rate hiking campaign.
• New listings also pulled back, down 12.7% m/m in February, reversing most of January's surge. The sales-to-new listings ratio rose very slightly to 49.9% from 48.3% – very much on the looser side of what's considered balanced. Notably, Ontario's housing market tipped further in favour of buyers, with the sales-to-new listings ratio dropping a but further to 36.6% from 37.3% in January, the loosest market conditions in the country. 
• Canadian average home prices declined 4.6% m/m in February, with prices falling in eight out of ten provinces. In contrast, prices rose in Saskatchewan and Manitoba.
• The MLS home price index, a more "like for like" measure, declined 0.8% m/m, and is down 1% on a year-on-year basis. Prices for detached units were down 0.9% m/m, while condo prices fell 0.1% m/m. CREA cited that the renewed softening in prices was most notable in Ontario's Golden Horseshoe region.  

Key Implications

• February's plunge in housing market activity has taken sales down to the lowest level since November 2023, with the twin hits of reduced confidence due to U.S. tariff threats and a big winter storm in Central Canada. Canadian home sales and prices had gained some momentum since the Bank of Canada began cutting rates last May. However, CREA noted that since tariffs were announced on January 20th a gap opened up between this year and last year's sales trends, suggesting uncertainty caused by tariffs has caused Canadians to think twice about this major purchase. 
• The Bank of Canada has since cut interest rates further to help cushion demand in the face of this threat, which should provide some support for housing at the margins. But as long as the U.S. keeps the threat of punitive tariffs alive, confidence in the housing market is likely to be under a cloud. 

Disclaimer

This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.