Investing.com -- The Canadian Real Estate Association (CREA) reported today a significant fall in home sales from January to February 2025. The decline comes as home buyers remain cautious due to the ongoing trade conflict with the United States.
Sales activity over Canadian MLS® Systems fell 9.8% month-over-month in February 2025, reaching the lowest level since November 2023. This represents the largest monthly activity decline since May 2022.
CREA’s Senior Economist, Shaun Cathcart, noted that the announcement of tariffs on January 20 led to a noticeable gap in home sales compared to the previous year. This trend persisted through February, resulting in a substantial drop in activity. The impact is already visible in softened prices, especially in Ontario’s Greater Golden Horseshoe region.
The decline in sales was widespread, affecting about three-quarters of all local markets and nearly all large markets. The Greater Toronto Area and surrounding Great Golden Horseshoe regions were particularly affected.
In February, national home sales dropped 9.8% month-over-month, and actual monthly activity was 10.4% lower than in February 2024. New listings fell 12.7% month-over-month, reversing the unexpected surge seen in January.
The MLS® Home Price Index (HPI) declined 0.8% month-over-month and was down 1% on a year-over-year basis. The actual national average sale price fell 3.3% on a year-over-year basis.
With similar declines in sales and new listings in February, the national sales-to-new listings ratio slightly increased to 49.9% from 48.3% in January. The long-term average for this ratio is 55%.
At the end of February 2025, there were 146,250 properties listed for sale on all Canadian MLS® Systems, a 13.1% increase from a year earlier but still below the long-term average of around 174,000 listings for this time of year.
James Mabey, CREA Chair, noted that the recent uncertainty has led some buyers to reconsider major financial decisions. However, for others, the softer pricing environment and lower interest rates present a buying opportunity.
Inventory on a national basis stood at 4.7 months at the end of February 2025, up from 4.1 months at the end of January. The long-term average is five months of inventory.
The National Composite MLS® Home Price Index (HPI) declined by 0.8% from January to February 2025, marking the largest month-over-month decrease since December 2023.