The Canadian real estate landscape is showing signs of adjustment, influenced by broader economic uncertainty and potential trade tariff impacts. Reflecting these evolving conditions, the Canadian Real Estate Association (CREA) has recently updated its outlook, revealing a slowdown in March sales activity and consequently revising its national housing market forecast for 2025 and 2026.

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March Data Signals Market Cooling

Recent statistics released by CREA indicate a noticeable shift in market dynamics during March 2025. Key findings include:

• Slowing Sales: National home sales decreased by 4.8% on a month-over-month basis in March, continuing a trend observed over the previous few months. Compared to the market peak in November 2024, national sales activity is now down by 20%. On a year-over-year basis, actual (not seasonally adjusted) sales in March 2025 were 9.3% lower than in March 2024, marking the lowest March activity since 2009.
• Buyer Hesitation: Increased uncertainty, particularly surrounding potential tariffs and their economic consequences, appears to be prompting many potential buyers to adopt a wait-and-see approach. As CREA’s Senior Economist, Shaun Cathcart, noted, "In short order we’ve gone from a slam dunk rebound year to treading water at best."
• Inventory and Market Balance: While new listings saw a modest 3% increase month-over-month in March, the drop in sales pushed the national sales-to-new listings ratio down to 45.9%. This is the lowest level since February 2009 and sits just below the range typically considered balanced (45% to 65%). Total inventory stood at 165,800 properties at the end of March, up 18.3% year-over-year but still slightly below the long-term average. This translates to 5.1 months of inventory nationally, the highest since the early pandemic period, indicating a market moving towards more balanced conditions.
• Price Moderation: The MLS® Home Price Index (HPI) saw a 1% decline from February to March, the most significant monthly drop since November 2023. Year-over-year, the national composite HPI was down 2.1%. The actual national average sale price in March 2025 was $678,331, representing a 3.7% decrease compared to March 2024.

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CREA Adjusts National Forecast Significantly

In light of the recent sales data and persistent economic unpredictability, CREA has made substantial revisions to its housing market forecast, initially published in January 2025. This marks one of the largest adjustments between quarterly forecasts since the 2008-2009 financial crisis.

• Revised 2025 Outlook: CREA now projects approximately 482,673 residential property sales via Canadian MLS® Systems in 2025. This represents a negligible 0.02% decline compared to 2024 – essentially flat – and is a significant downgrade from the 8.6% increase forecasted in January.
• Price Projections Lowered: The national average home price forecast for 2025 has also been adjusted downwards. It is now expected to decrease slightly by 0.3% annually to $687,898. This revised figure is roughly $30,000 lower than the January projection.
• Regional Variations Persist: While the national average price is expected to dip slightly, regional differences remain significant. Small average price declines are anticipated in British Columbia and Ontario. In contrast, other provinces are still expected to see price growth, although these forecasts have been moderated, now generally falling within the 3% to 5% range for 2025.
• Modest Expectations for 2026: Looking ahead to 2026, CREA anticipates a modest improvement, with national home sales forecast to increase by 2.9% to 496,487 units. This level, however, would still fall short of the half-million mark for the fourth consecutive year. The national average price is projected to edge up by 1.2% from 2025 levels, reaching $696,074.

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Navigating Your Local Market

It is essential for buyers and sellers to recognize that national statistics provide a broad overview, but real estate remains fundamentally local. As highlighted by CREA Chair Valérie Paquin, market conditions can differ dramatically from one region to another. Some areas continue to experience strong demand and limited inventory, while others are seeing slower activity and rising supply.

Understanding the specific dynamics of your neighbourhood is crucial for making informed decisions in the current environment. Factors like local employment, inventory levels, and buyer demand patterns significantly influence property values and transaction timelines.

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What This Means for You

The current market presents a complex picture. While national trends suggest a cooling period driven by economic caution, local conditions vary. This environment underscores the importance of expert advice. Whether you are considering buying, selling, or investing, partnering with a knowledgeable local REALTOR® provides the critical insights needed to navigate market shifts effectively and achieve your real estate goals.

Stay informed by following market updates. CREA is scheduled to release its next statistics package on May 15, 2025, and its subsequent forecast update on July 15, 2025.