Canadian Home Sales Fall 6.9% From a Year Ago as Trade War and Rate Fears Collide

Since Canada's retaliatory tariffs took effect Sept. 8, the trade fight with Washington has moved from headlines into hard housing numbers. The Canadian Real Estate Association reported Tuesday that national home sales totaled 37,504 in August, down 6.9% from August 2025, according to CREA data cited by BNN Bloomberg and CTV News.

On a seasonally adjusted basis, sales slipped 0.7% from July, according to Bloomberg, ending three straight months of gains. New listings rose 3.3% month-over-month, snapping a run of three consecutive declines earlier in the summer.

The two national price measures moved in different directions. CREA's national average sale price hit $668,219 in August, up 0.6% year-over-year, according to BNN Bloomberg and CTV. Bloomberg reported the separate MLS benchmark price, which adjusts for the type and size of homes sold, held flat from July at C$657,400 ($472,800), about 3% below year-ago levels.

CREA senior economist Shaun Cathcart said rising inflation risks and the possibility of looming interest rate hikes have weakened the economic environment in ways that could hurt sales activity going forward, according to BNN Bloomberg. Cathcart did not attribute the slowdown solely to the trade dispute with the U.S.

Toronto Breaks Its Streak

The Toronto Regional Real Estate Board (TRREB) reported 5,057 home sales in August, down 2.1% year-over-year and down 1.3% from July, marking the market's first monthly decline in six months, according to Ground News and Bloomberg. New listings plunged 14.1% to 12,075.

TRREB's Jason Mercer said trade tensions with the U.S. and concerns over future borrowing costs weighed on prospective buyers, according to Ground News. TRREB president Daniel Steinfeld suggested the drop in new listings could eventually tighten competition and put renewed upward pressure on prices.

Condo benchmark prices in the Toronto region fell 7.1% year-over-year, the steepest decline of any property type, while the composite benchmark price dropped 4.5% year-over-year, according to Ground News.

A Country Split in Two

RBC Economics described Canada's housing market as showing "persistent regional splits" in August. Toronto's recovery is faltering "amid escalating trade uncertainty," while Ottawa's prices edged above year-ago levels for the first time since November 2025, according to RBC.

British Columbia remains the weakest region, with Vancouver and the Fraser Valley still seeing price declines, though at a slower pace, RBC said. Montreal is seeing more sellers step up, with new listings up an estimated 7.1% seasonally adjusted from July, even as demand stays subdued. Calgary and Edmonton are cooling too, though population growth is providing some support.

RBC attributed the uneven picture to a mix of trade policy uncertainty, declining populations in some regions, and structural supply dynamics playing out differently market to market, not trade tensions alone.

The Trade War Behind the Numbers

Canada's counter-tariffs, covering $20 billion of U.S. goods at rates from 15% to 50%, took effect just after midnight Sept. 8, according to Reuters reporting carried by the Daily Signal. That followed Washington's Section 338 tariffs of 50% on roughly $20 billion of Canadian goods, which took effect Aug. 22.

Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance and a member of Prime Minister Mark Carney's advisory committee on U.S. relations, told Reuters he worries about "an escalatory spiral," while acknowledging Carney "needs to find areas of leverage." A government source told Reuters there are currently no talks underway between the two governments at the ministerial or official level.

A Reuters/Ipsos poll found just 20% of Americans approve of Trump's tariffs on Canadian goods.

A Fox News column offered pushback on the scale of the fallout, arguing the current tariffs cover only about 5% of Canadian exports to the U.S. and roughly 6% of Canadian imports from the U.S., calling it "a skirmish" rather than a war. The piece argued the real threat is Trump's planned 50% tariff on autos, trucks and parts starting Jan. 1, which would push affected trade above $100 billion combined with likely Canadian retaliation.

Current tariffs genuinely touch a small share of the roughly $900 billion in annual U.S.-Canada trade. CREA's own economist points to interest rates and inflation, not tariffs alone, as drivers of the August housing slowdown. Whether the trade dispute is the dominant cause of Canada's cooling housing market, or one factor among several including borrowing costs and regional supply gaps, remains to be seen in coming months.

Jan. 1 will be a key date when Trump's threatened 50% auto tariffs are set to take effect absent a deal. With no ministerial talks currently scheduled between Ottawa and Washington, according to Reuters, the housing figures released Tuesday offer an early glimpse of what a broader trade conflict could mean for a market already navigating rate uncertainty and regional imbalances.