In March, the year-over-year change in new listings (yellow bars below) outpaced sales volumes (blue bars) in all major Canadian urban areas.
See Canada’s homebuyers wait out trade war fallout:
March saw more homebuyers retreating to the sidelines amid growing tariff threats—waiting to see what will happen to our economy next. This drove home resales down materially for a second straight time in many markets—reaching cyclically lows in southern Ontario, which is especially vulnerable to trade turbulence.
Several local real estate boards also reported weaker home prices in March including the Toronto region, Hamilton, Kitchener-Waterloo, Cambridge, Vancouver and Fraser Valley. Even in Calgary, prices flattened.
Prices are getting marked down, but relatively slowly, overall. Many properties are stuck in limbo while sellers hope for a return to the salad days of easy credit and bidding wars.
Property values are coming under pressure as inventories get more plentiful—stoking competition between sellers—while demand is skittish. Bargaining power has clearly shifted in the buyer’s favour in Vancouver, Fraser Valley, Toronto and other southern Ontario markets like Hamilton, Kitchener-Waterloo, St. Catharines, Niagara Falls and Windsor.
Data from Information Technology Systems Ontario (ITSO) and the Toronto Regional Real Estate Board (TRREB) shows that bidding activity on homes in the GTA largely seized up in March:
According to the report, approximately 20 per cent of GTA neighbourhoods with at least five sales were in overbidding territory in March, which is unchanged from February but down from 43 per cent just a year ago. On the other hand, the majority (73 per cent) remained in underbidding territory, with an additional seven percent at asking.
The 2024 Joe Debtor Canadian Consumer Solvency Study is available here; some takeaways:
Mortgage Renewals Financial stress among homeowners is expected to escalate due to higher mortgage renewal rates, potentially doubling the proportion of homeowner insolvencies to 8-10%.
Pre-Construction Market Stress: Struggles in the pre-construction condo market may contribute to rising real estate insolvencies as appraisals fall below original purchase prices. Investors can include any shortfall as an unsecured debt in a consumer or Division I proposal.
Regulatory Changes: New interest rate caps on high-interest lending may accelerate insolvencies by limiting access to emergency credit, a traditional stopgap for distressed individuals. The lack of short-term lending may pull many insolvencies forward.
This outlook highlights the many economic pressures burdening indebted Canadians, which we expect will continue to drive a substantial rise in insolvency filings in 2025.
Escalating financial stress among owners and lenders suggests downward pressure on property prices should continue.
;
