Canada’s February housing starts reached 229,000, falling short of the predicted 250,000 and down from the previous 239,700. In Ontario, a report indicates that the anticipated seasonal rise in March sales within the Greater Toronto Area is not occurring as expected.
Furthermore, Canadian home sales dropped by 9.8% in February, as reported by CREA. The decline followed the announcement of tariffs on January 20, creating a gap in sales figures compared to the previous year, which continued to widen throughout February. This trend may lead to price declines, particularly in Ontario’s Greater Golden Horseshoe region.
Market Hesitations And Declining Demand
These figures paint a clear picture of a housing sector struggling to keep pace with expectations. A shortfall in new residential projects suggests developers are either holding back due to financing concerns or responding to softening demand. The fact that Ontario, a region that typically sees a seasonal lift in sales during March, is failing to do so points to broader hesitations in the market.
Nationally, the 9.8% year-on-year drop in sales volume shows the slowdown is not confined to a single province. The introduction of tariffs in January appears to have disrupted purchasing plans, creating a lasting gap in sales activity that widened throughout February. If this trend continues, price pressures may build, particularly in Ontario’s Greater Golden Horseshoe, an area already at risk due to its reliance on sustained growth in housing demand.
With fewer transactions taking place, supply-demand dynamics could shift quickly. Sellers who had initially priced their properties optimistically may begin to adjust expectations, leading to gradual price declines. Those waiting for the market to regain momentum could find themselves extending listing periods, adding further uncertainty. Buyers, on the other hand, may see these developments as reason to delay purchases, anticipating further reductions in price before committing.
Impact Of Financing And Economic Confidence
Financing conditions are also worth watching. If lending rates remain elevated or credit availability tightens, it could influence both buyer sentiment and construction timelines, reinforcing the slowdown. Developers and investors in housing-linked markets must assess whether existing projections still hold or need reassessment in light of softer-than-expected demand.
These factors extend beyond immediate sales numbers. A weaker housing market has the potential to influence broader economic confidence, affecting consumer behaviour in other sectors. Whether this becomes more pronounced in the coming weeks will largely depend on how market participants react to shifting conditions.
