Key Insights on Tariff Impacts: RBC Special Housing Report

RBC recently released a special housing report examining the impacts of uncertainties on Canada’s housing market. The report aims to assess the effects on the market as it faced tariffs, volatile weather conditions, and other shifting dynamics in regional real estate activity.

According to the report, early signs of market optimism observed in January quickly dissipated as concerns over the economic consequences of trade disputes took hold. As uncertainty grew, sellers and buyers alike reacted to the economic uncertainties, prompting a noticeable shift in market sentiment. Early figures from local real estate boards revealed a widespread decline in home sales between January and February, with the Toronto market experiencing the steepest drop, plunging to a new cycle low. Other key markets including Vancouver, Fraser Valley, Calgary, and Montreal also registered significant downturns in activity.

Housing Supply

A key trend highlighted in the report is the rapid increase in housing supply in certain areas. In January, a surge in the number of properties listed for sale across several regions, most notably in Vancouver, Fraser Valley, and Toronto, has given buyers greater selection. 

This increased supply appears to be putting downward pressure on property values, with the MLS Home Prices Index falling below year-ago levels in these regions. In Toronto, for instance, the index saw a 1.5% decline from January to February and is down 1.8% on an annual basis. This trend, especially evident in the condo segment, highlights the market’s vulnerability amid growing economic uncertainty.

Regional Variations

Regional differences continue to be evident. Edmonton remains one of the more resilient markets, where property prices continue to climb despite the overall slowdown. In contrast, Montreal has experienced the largest drop in transactions in four years due to both trade war-related anxieties and severe winter storms, halting a sustained post-pandemic rebound. Similarly, Vancouver’s recovery has been set back, with a notable decline in resale activity and a softening in home prices, particularly for condos, as market participants adjust their expectations in the face of persistent trade tensions.

Toronto

Home resales dropped by 29% seasonally adjusted from January to February 2025, for the biggest one‐month decline since the early pandemic period. The composite MLS Home Price Index (HPI) fell by 1.5% from January to February.

Montreal

Transactions decreased by an estimated 11% seasonally adjusted in February, the largest drop in four years.

Vancouver

Home resales fell by over 15% seasonally adjusted from January to February, with the MLS HPI slipping by about 1.1% year-over-year.

Calgary

Resale activity dipped roughly 12% seasonally adjusted from January to February, while the market remains somewhat balanced; Calgary’s MLS HPI shows a modest 0.9% increase on an annual basis.

Edmonton

Edmonton remained one of the country’s stronger markets, with prices continuing to rise steadily despite experiencing some effects of the broader slowdown in activity.

Future Outlook

The report also underscores that the emerging trade war threatens to deepen market volatility. As tariffs loom and economic uncertainty persists, there is a growing concern that this turbulence could further dampen market confidence and curb the traditionally busy spring season. RBC’s special housing report highlights the current market at a crossroads, with insights into how external economic factors, notably trade disputes, could reshape the landscape. The full report can be viewed on their website.