Canada-U.S. Trade Wars, and an Optimistic Outlook for Canada’s Biggest Housing Markets

This week’s top real estate stories.

By  Jared Lindzon | 2 minute read

Every Friday, Wahi brings you the most important real estate stories from the past week. 

(Trade) War. What is it Good For?

Canada came within hours of total economic collapse on Tuesday before being pulled back from the brink of “the dumbest trade war in history.”  Though our American neighbours aren’t manufacturing so much these days, they remain world leaders in manufacturing economic crises that send shockwaves north of the border. Earlier this week, when a trade seemed imminent, Canada’s 5-year bond yield tanked, along with fixed mortgage rates, before rebounding hours later following news that the tariffs would be paused for at least 30 days. Should they materialize then, economists warn it could tip the country into a recession.

What Tariffs Would Mean For the Housing Market

Though President Trump backed away from a full-on trade war with Canada at the 11th hour, the temporary truce only kicked the can down the road by 30 days. With the threat now hanging over the country like a relentless rain cloud, it’s worth considering what the tariffs would mean for the housing market should they be imposed at that time. In short, construction costs would skyrocket, according to builders on both sides of the border, while already sluggish home sales in Canada would be further slowed by a recession, though it would likely lead to even lower interest rates.  

Slow and Steady, Probably  

Canada’s housing market is one of the few things expected to get less chaotic in the coming years. This week, CMHC forecasted a “modest” 2025 buying season across the country, with activity picking up in 2026 and 2027 — assuming tariffs don’t materialize. The report suggests housing sales and prices will rebound from last year’s lows thanks to lower mortgage rates, lower immigration rates, higher inventory and pent-up demand. Higher vacancy rates, meanwhile, are expected to slow price growth in the rental market. The agency also anticipates construction slowing in the coming years across all housing types other than rental apartments.

A Tale of Two Housing Markets  

The country’s two biggest housing markets had two very different starts to the year. According to the Toronto Regional Real Estate Board GTA home sales were down 7.9% in January compared to last year, with just under 3,850 properties changing hands so far in 2025. The West Coast, meanwhile, is already seeing buyers return to its biggest market, with Greater Vancouver Realtors reporting an 8.8% jump in sales last month compared to January of 2024. Total Vancouver sales, however, still lag the Toronto market, with 1,552 so far this year, more than 11% below the 10-year average.

Unshakable Optimism in Canada’s Biggest Markets

Toronto and Vancouver’s Realtor groups are keeping up their mindfulness and gratitude practices, maintaining a positive headspace in unstable times. Despite a slow start in Toronto, and that little trade war threat looming across the border, both cities’ real estate boards have a strong and stable market on their vision boards for 2025. This week the Toronto Regional Real Estate Board projected a 12.4% increase in home sales this year, thanks to lower borrowing costs, greater supply and high demand. Greater Vancouver Realtors similarly anticipates lower borrowing costs, greater inventory and pent-up demand leading to a “strong year ahead.” 

Canada on Track to Miss its Housing Targets by Slightly Less

Canada was never close to hitting its 2030 housing targets, but thanks to a reduction in immigration, the country is on track to miss the mark by a little less. According to a new report the drop in immigration will result in the first population decline since Confederation in 1867, from 41.3 million last year to 41.1 million in 2026. That means the country will need about half a million fewer homes than previously estimated, dropping the target to 400,000 annually, down from 445,000. The record for housing starts in Canada was set in 1976, with 273,200 new units.    

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