This summer, Canada experienced high temperatures, but the housing market remained cold, with many buyers hesitant to commit. According to Penelope Graham, a mortgage expert at Ratehub.ca, the unusual market dynamics are driven by concerns over potential tariffs from the U.S. government under President Donald Trump, which created significant anxiety among Canadian buyers. This unease about the economy, coupled with fears of a looming recession and job loss, caused many potential homebuyers to pause their purchasing decisions. Anticipations for a robust housing market in 2025 had built up previously, but the external pressures have altered those expectations dramatically.
A recent report from RBC predicts a decline in resales, estimating around 467,100 homes to change hands this year—a 3.5% dip compared to the previous year. The majority of this decline has already occurred, significantly impacting the first half of the year. The summer housing market saw an increase in available inventory, allowing buyers more options and time to deliberate. Realtor Shawn Zigelstein highlighted that unsold properties lingered on the market longer than normal, resulting in buyers feeling less pressured to act quickly.
The current market has provided a unique breathing room for buyers. Unlike the frenzied conditions of 2022, where quick, unconditional offers were the norm, buyers now have the chance to include contingencies such as home inspections and financing clauses to safeguard their investments. Rishard Rameez, CEO of the real estate brokerage Zown, noted that many buyers are opting to delay their home purchases, weighing the risks and considering their options more strategically before making commitments.
Unexpected obstacles have contributed to many buyers re-evaluating or even abandoning their purchase plans. For instance, one couple’s initial excitement turned to concern after discovering asbestos during a property inspection, highlighting the importance of thorough checks in today’s uncertain climate. Rameez pointed out that financing conditions play a crucial role in deal success, as even minor fluctuations in property valuations can impact mortgage approvals, leading to deals falling through.
Despite the challenges, there are signs of a slight rebound in the housing market as the summer progressed, with four consecutive months of increased sales reported by the Canadian Real Estate Association. Graham noted that a backlog of inventory is now seeing movement, which may indicate a more competitive atmosphere for potential buyers. Economists like RBC’s Robert Hogue predict a gradual recovery continuing into the latter half of the year, paving the way for increased demand by 2026, even if the market is currently 17.6% lower than its peak in February 2022.
Looking ahead, experts remain cautious. The anticipated fall housing market might not match historical averages due to ongoing economic volatility, including tariff concerns and the uncertainties stemming from a potential trade war. While Zigelstein acknowledges that the fall is typically a strong period for home sales, he also implies that the lingering summer chill may persist, suggesting that while there may be some improvement over summer results, it’s unlikely to fulfill the traditional expectations of a robust fall market.
