The Canadian Real Estate Association (CREA) reported that existing home sales increased in June for the second straight month. However, a meagre start to the year and waning confidence amid trade tensions have resulted in CREA downwardly revising its 2025 outlook for home sales. The US has announced the potential for more tariffs on Canada beginning in August, which has heightened uncertainty about Canada’s economy and could hurt demand for real estate.

• Existing home sales in Canada rose by 3.6% in June. This marked the second straight monthly increase after rising by 3.5% in May. Home sales stalled at the beginning of the year as the threat of tariffs dragged down consumer confidence and raised concerns about the Canadian economy.
• Home sales could pull back as trade tensions persist. CREA has revised its outlook for sales this year, now expecting a 3.0% decline compared to 2024. The real estate organization originally projected an 8.6% increase in 2025.
• The Bank of Canada has held rates steady at recent meetings. While mortgage rates have come down over the past year, they remain elevated compared to the start of the pandemic, when real estate market activity and prices surged higher.
• The average home price across Canada rose by 1.5% in June to $678,399.
• Canada’s government has put a focus on increasing the supply of homes, in part to help ease affordability concerns. The Canada Mortgage and Housing Corporation reported that housing starts rose by 0.4% in June.

Like other areas of the economy, the real estate market has seen a slowdown in activity in 2025 as trade disruptions cloud the outlook for Canada’s economic activity. A trade deal and more economic certainty might boost confidence and help the real estate market pick up. Canada’s real estate market has ebbed and flowed in the past, but has proven its relative strength over the long term.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.