tariffs-affected-the-canadian-housing-market

How Tariffs Are Reshaping Canada’s Housing Market

Three months after the Canadian government imposed new tariffs on imported construction materials (steel, aluminum, and lumber), the real estate market is feeling the effects. While these measures aimed to protect domestic industries, they’ve also sparked concerns about housing affordability, supply delays, and buyer behavior. With preliminary data now available, we analyze how these tariffs are influencing Canada’s housing landscape—and what it means for buyers, sellers, and investors.

1. Rising Construction Costs: A Direct Impact

The most immediate consequence? Higher expenses for builders. Tariffs have increased the cost of key materials, leading to:

  • 5–10% price hikes for new homes in high-demand markets (Toronto, Vancouver).
  • Squeezed profit margins for developers, potentially slowing future projects.

Why it matters: Buyers may face steeper prices, especially in urban centers.

2. Slowdown in New Housing Starts

With construction costs climbing, developers are reconsidering project timelines:

  • Modest decline in housing starts (Q2 2025 data).
  • Risk of worsening Canada’s existing housing shortage if trends persist.

Key takeaway: Fewer new builds could mean more competition for existing homes.

3. Shift Toward Alternative Materials

To offset costs, some builders are:

  • Sourcing materials domestically (supporting local industries but facing longer lead times).
  • Experimenting with alternative construction methods (e.g., modular homes).

Trend to watch: Will innovation ease price pressures long-term?

4. Regional Variations: Cities vs. Suburbs

Major Cities (Toronto, Vancouver, Montreal)

  • Price resilience: High demand absorbs some cost increases.
  • Slower inventory growth: Delays in new developments.

Smaller Markets & Suburbs

  • Affordability pressures: Buyers more sensitive to price hikes.
  • Shift to resale homes: Some purchasers opting for existing inventory.

5. Long-Term Outlook: Adaptation or Stagnation?

Economists predict:

  • Short-term pain: Higher costs and delays.
  • Potential stabilization: If supply chains adjust or tariffs ease.

Critical question: Will policymakers intervene to balance industry protection and housing affordability?

What This Means for You

Buyers

  • Expect higher prices in new developments—consider resale or pre-construction deals.
  • Lock in mortgage rates early if borrowing.

Sellers

  • Increased demand for existing homes in supply-constrained markets.
  • Highlight energy efficiency or upgrades to stand out.

Investors

  • Monitor regional trends—smaller markets may offer opportunities.

Upstate Realty’s Expert Insight

At Upstate Realty, we track market shifts to guide your decisions. Whether you’re buying, selling, or investing, our team provides data-driven advice tailored to today’s challenges.

📞 Contact us for a free consultation on navigating the 2025 market!

Sources & Disclaimer

  • Canadian Home Builders’ Association (CHBA)
  • Canada Mortgage and Housing Corporation (CMHC)
  • Bank of Canada economic reports

Disclaimer: This analysis is for informational purposes only. Market conditions vary—consult a real estate professional for personalized advice.

real-estate-business-work-money

May 2025 Market Update: Inventory Surges, Prices Dip Across GTA

Toronto Housing Market Favors Buyers in 2025 as Listings Surge

June 4, 2025 – Toronto’s housing market reached a pivotal moment in May 2025, with active listings hitting levels not seen in nearly 25 years as buyers gained significant negotiating power amid sluggish sales and improving affordability. Here are the key takeaways from the latest TRREB Market Watch report:

📉 Sales & Inventory Dynamics

  • Sales dropped 13.3% YoY (6,244 vs. 7,206 in May 2024)
  • New listings surged 14% YoY to 21,819 – highest since March 2021
  • Active listings skyrocketed 41.5% YoY to 30,964 – the highest level since August 2002
  • Monthly sales rose 11.7% from April, marking a 2-month recovery trend

💰 Pricing Trends

  • Average price fell 4% YoY to $1,120,879
  • MLS® HPI Composite benchmark down 4.5% YoY
  • Detached homes led sales (2,998 units) but saw biggest price drop (-5.4% YoY)
  • Condo apartments suffered steepest sales decline (-25.1% YoY)

🏠 Property Type Performance (YoY Change)

|     Type      |  Sales | Avg Price |
|---------------|--------|-----------|
|   Detached    | -10.6% |   -5.4%   |
| Semi-Detached | -0.3%  |   -6.4%   |
|   Townhouse   | -9.8%  |   -4.5%   |
|   Condo Apt   | -25.1% |   -6.4%   |

📣 Industry Insights

TRREB President Electris Barry-Sponds noted: “Homebuyers have benefited from greater choice and improved affordability this year – but each neighborhood has its own dynamics.”

Chief Information Officer Jason Mercer highlighted economic concerns: “The issue is a lack of confidence in trade stability with the U.S. Once resolved, sales will pick up. Further rate cuts would also help.”

🔍 Key Context

  • Mortgage rates dipped slightly: 3-year fixed at 6.05% (▼), 5-year at 6.09% (▼)
  • Bank of Canada rate held at 2.8%
  • Days on market surged: Avg. LDOM up 31.6% to 25 days, PDOM up 44.4% to 39 days

🏙️ Regional Highlights

  • Toronto Central saw highest average price ($1,242,145) despite 30.3% sales-to-new-listings ratio
  • Durham Region showed strongest seller leverage with 101% avg. SP/LP ratio
  • King Township had longest market exposure (Avg. LDOM 48 days)

The Bottom Line

While affordability has improved with lower prices and borrowing costs, buyer hesitancy persists amid economic uncertainty. With inventory at generational highs and properties taking longer to sell, the market firmly favors buyers – though regional variations remain significant. Any resolution to trade tensions or further rate cuts could quickly shift dynamics.

Need expert advice on navigating the market? Contact Upstate Realty today to discuss your next move! 🏡📉📈

🔹 Call us at (416) 581-8000
🔹 Visit our website: www.upstaterealty.ca

Source: TRREB Market Watch, May 2025 | Data as of June 4, 2025

investment-in-ca-real-estate

Bank of Canada’s Interest Rate Decision

The Bank of Canada (BoC) is set to announce its latest interest rate decision on Wednesday, June 4, and the real estate market is watching closely. After holding rates steady in April and May, economists are divided on whether the central bank will cut rates this week or wait for clearer economic signals.

For real estate investors and homebuyers, the BoC’s decision could influence mortgage rates, affordability, and market activity. Here’s what Canada’s biggest banks are predicting—and what it means for your next move.

Key Factors Influencing the BoC’s Decision

Before making its rate announcement, the BoC has highlighted several critical considerations:

  • Trade uncertainty (impact of U.S. tariffs on Canadian exports)
  • Slowing job market (unemployment rose to 6.9% in April)
  • Core inflation remains elevated (above 3%)
  • Weak GDP growth (economy expanded just 0.1% in March)

While some economists argue that another rate cut is needed to stimulate growth, others believe the BoC will hold steady to avoid fueling inflation.

What the Big Banks Are Saying

1. TD Bank: Two More Cuts Likely in 2025

  • June Prediction: Hold (no change)
  • Outlook: TD expects two more cuts later this year, citing weakening job markets and sluggish economic growth.

2. RBC: A Close Call, But Likely a Hold

  • June Prediction: Hold
  • Outlook: RBC believes the BoC will wait for more data before cutting again, especially with inflation still above target.

3. Scotiabank: No Cuts Until Inflation Cools Further

  • June Prediction: Hold
  • Outlook: Scotiabank argues the BoC won’t cut until core inflation drops significantly, possibly not until 2026.

4. CIBC: A Cut Would Be Justified, But Unlikely Now

  • June Prediction: Hold (but dovish messaging)
  • Outlook: CIBC thinks the BoC should cut now due to economic weakness but expects a July or September cut instead.

5. BMO: Rates Will Stay Put for Now, But More Cuts Coming

  • June Prediction: Hold
  • Outlook: BMO forecasts rate cuts resuming in late July, with the overnight rate potentially falling to 2.0% by early 2026.

What This Means for Real Estate

If the BoC Holds Rates (Most Likely Scenario)

  • Mortgage rates remain stable in the short term.

  • Buyers may delay decisions, waiting for future cuts.

  • Sellers could see slower demand if affordability doesn’t improve.

If the BoC Surprises With a Cut

  • Mortgage rates could dip slightly, boosting buyer activity.

  • Investors may move quickly to lock in lower financing costs.

  • Market sentiment could improve, supporting home prices.

Should You Buy, Sell, or Wait?

  • Buyers: If mortgage rates drop later this year, waiting could pay off—but inventory may tighten.

  • Sellers: A hold means steady demand, but a future cut could bring more buyers into the market.

  • Investors: Watch for July’s decision—if the BoC cuts then, real estate could see a late-summer surge.

Stay tuned for Upstate Realty’s post-announcement analysis on Wednesday afternoon!

Need expert advice on navigating the market? Contact Upstate Realty today to discuss your next move! 🏡📉📈

🔹 Call us at (416) 581-8000
🔹 Visit our website: www.upstaterealty.ca

Source: Zakiya Kassam, Where Every Big Bank Stands On Wednesday’s Interest Rate Announcement (June 2, 2025)