Looking to buy a house in Canada amid trade war? What RBC report is telling us about the real estate market

The ongoing trade war between the U.S. and Canada has cooled Canadian housing markets significantly. Anxiety over tariff uncertainty and a looming threat of recession have led to notable shifts in market activity and home prices across the country, according to a recently released special report on housing from RBC . Home resales have dropped sharply, with March 2025 marking the third consecutive monthly decline. Nationally, resales were down an estimated 4 per cent from February and 15 per cent from December. In major markets like Toronto, resales in March were the lowest since 1998, dropping more than 30 per cent since the U.S. began its trade overhaul. In Vancouver, home resales have fallen 23 per cent year-to-date, says RBC. The trade war has made potential buyers more reluctant due to concern about job security and the broader economy. Many are choosing to wait out the uncertainty, rather than make the significant financial commitment to buy a home. Buyer uncertainty met with increased listings Despite that shift, new listings have increased . Toronto’s listings are up 8.1 per cent, while sales in that market have dropped 23.3 per cent. This imbalance has led to increasing inventory and more competition among sellers. This has shifted bargaining power to buyers , putting downward pressure on prices. In Toronto, the composite MLS Home Price Index fell by $35,000 (-3.2 per cent) over three months, with further declines expected. Vancouver’s benchmark price has also slipped for three straight months and is now 0.6 per cent below its level from a year ago. Nationally, prices are expected to continue softening, especially in Ontario and British Columbia, according to BNN Bloomberg . Downturn worse in trade-sensitive markets The regions in Canada most vulnerable to the trade war’s effects on housing are those with economies heavily tied to cross-border trade, especially sectors targeted by U.S. tariffs. The impact is most pronounced in southern Ontario, such as the cities of Toronto, Hamilton, Kitchener-Waterloo, Cambridge, Windsor, Brantford, Guelph, St. Catharines and Niagara Falls. The economies of these cities are deeply integrated with the U.S. via the automotive, steel, and manufacturing industries. The most intense retreats in housing activity and prices have been there, with Toronto experiencing its weakest sales in decades and other cities like Hamilton and Kitchener-Waterloo seeing notable price declines and surging inventories. Market drops across the country As Canada’s least affordable market, Vancouver is highly sensitive to economic reverberations. The trade war has led to a significant drop in home resales (down 23 per cent year-to-date) and falling prices, with buyers gaining bargaining power due to increased supply. Calgary is a major energy and beef exporter, making it highly exposed to U.S. tariffs on these commodities. The city has seen a significant rise in listings and a drop in sales, with prices flattening and market balance shifting as a result of weaker demand. Saint John is particularly vulnerable due to its dependence on crude oil exports, primarily from the Irving Oil Refinery. Tariffs on energy exports could have a severe local economic impact, translating into weaker housing demand. The Quebec cities of Saguenay, Trois-Rivières, Drummondville are major exporters of aluminum and forestry products, both targeted by U.S. tariffs. Any slowdown in these industries could reduce jobs and housing demand. Job security confidence falling Confidence in job security in Canada has dropped to its lowest level since the early pandemic, with only 44.9 per cent of Canadians expressing confidence in their job stability as of April 2025. Nearly 30% are unsure about their job security, a sharp increase in just two months. This uncertainty is causing many would-be buyers to hesitate or postpone major financial commitments like home purchases. According to a recent BMO survey , 74% of Canadians are concerned about a possible recession, and only 14 per cent of those planning to buy a home intending to do so in 2025, with many deferring to 2026 or later. More than half feel homeownership is less attainable than a year ago, and two-thirds are less confident they will ever own a home. Private sector workers are more affected by job security concerns than public sector employees, who generally feel more secure and may be more willing to buy homes. Newcomers and renters, facing higher perceived risks of job loss, are particularly likely to delay or forgo home purchases.

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