Tariff uncertainty put downward pressure on home resales in January while total listings saw one of the biggest spikes in decades, said the Canadian Real Estate Association on Tuesday.
Sales were down 3.3 per cent from December when seasonally adjusted as deals trailed off in the last week of the month, though January sales were still up 2.9 per cent compared with a year earlier.
New listings were up 11 per cent from December in what the association said was the largest seasonally adjusted monthly increase on record going back to the 1980s, outside of some wild pandemic swings.
Compared with a year earlier, January new residential listings were up 23 per cent, including an almost 50 per cent jump in Greater Toronto.
“The standout trends to begin the year were a big jump in new supply at an uncommon time of year, as well as a weakening in sales which only showed up around the last week of January,” said Shaun Cathcart, CREA’s Senior Economist, in a statement.
“The timing of that change in demand leaves little doubt as to the cause – uncertainty around tariffs."
U.S. President Donald Trump's inauguration on Jan. 20 has ushered in threats and worries about Canada's most important trading relationship, leading to wider concerns about potential economic impacts.
Along with concerns about the U.S., there's also an election in Ontario and one pending federally to add to the unease, said Shawn Zigelstein, broker and head of Team Zold with Royal LePage Your Community Realty.
"You've got so much uncertainty out there that at the beginning of the month, everybody threw their place on the market," he said.
The increase in listings has so far not led to much price change. The average price was up 1.1 per cent from a year earlier at $670,064 and down two per cent seasonally adjusted from December. The aggregate benchmark price of $720,500 was up 0.2 per cent from a year earlier and down 0.1 per cent from the previous month.
The lack of much price change is happening as there are relatively few forced sales, as indicated by a mortgage delinquency rate that remains below pre-pandemic levels.
While there are some who are facing a real crunch, the rise in listings seems to be coming more from sellers like those looking to offload a rental or investment, so there's less pressure on prices, said Zigelstein.
It remains to be seen how long the trend will hold up though.
"Economically, do we believe that if there are more listings out there, buyers will have more opportunities to negotiate prices, and prices should come down a little bit more? That is the traditional economic thought process," he said.
"We haven't seen that huge difference yet take place, so it'll be interesting to watch what happens over the next couple of months for sure."
The rise in listings is happening as rental rates pull back, hitting an 18-month low in January after a 4.4 per cent decline on an annual basis, while a wave of condo completions is also expected this year.
The total of nearly 136,000 active listings across Canada at the end of January was up almost 13 per cent from a year earlier, but still below the long-term average for the season of around 160,000, said CREA.
This report by The Canadian Press was first published Feb. 18, 2025.
Ian Bickis, The Canadian Press
