Canadian Existing Home Sales (January 2025)

Tariff uncertainty weighs on Canadian housing markets in January 

• Canadian existing home sales dropped 3% month-on-month (m/m) in January, weighed down by declines in Ontario and Quebec (-4% m/m). In contrast, sales were up in Alberta (+2.1% m/m).
• New listings jumped 11% m/m in January, marking the largest seasonally adjusted increase in new supply on record going back to the late 1980s, according to the Canadian Real Estate Association (CREA). The increase was driven by surges in B.C. and Ontario. The sales-to-new listings ratio plunged to 49.3% from 56.5% – veering towards supply/demand levels that typically favour buyers. 
• Canadian average home prices declined 2% m/m in January, weighed down by declines in Ontario (-7% m/m), and B.C. (-4% m/m). On the flipside, prices rose in Quebec (+1.8% m/m) and Alberta (0.7% m/m).
• The MLS home price index, a more "like for like" measure, was flat. Prices for detached units were flat, while condo prices fell 0.3% m/m.  

Key Implications

• Canadian home sales and prices had gained some momentum since the Bank of Canada began cutting rates last May. However, listings jumped in January and CREA noted that last month's sales weakness was concentrated in the last week of the month. This almost certainly indicates that tariff-related uncertainty was at play, with buyers displaying anxiety and sellers hurrying to list their properties ahead of potential economic softness. 
• Absent this economic uncertainty, it could have easily been a firmer year for housing market activity in 2025, especially with interest rates having pushed lower in the back half of last year. If the economic backdrop does indeed weaken moving forward, home prices could push lower. In this scenario, affordability wouldn't necessarily improve if household incomes are impaired as well. 

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.