In a current Q&A session, Oxford Economics stated it expects the Canadian housing market to proceed its present gross sales stoop into subsequent 12 months, citing larger borrowing prices, weakening shopper confidence, and broader financial uncertainty.
“We’ve seen some very low ranges of unit gross sales throughout the nation,” stated Senior Economist Michael Davenport, who pointed to an estimated 8–10% peak-to-trough value correction in the most costly markets, with notable declines already evident in each the Larger Toronto and Larger Vancouver areas.
On a nationwide stage, Davenport famous that resale exercise is roughly 15% under the five-year common, with the sales-to-new-listings ratio holding close to 50. That’s proper on the threshold of a balanced market, however a major step down from pandemic-era highs.
Whereas the resale market continues to weaken, Oxford says new building has held up considerably higher, although it too is now trending downward. The agency expects nationwide housing begins to whole round 225,000 items in 2025, down from 245,000 in 2024 and effectively under the 2021 peak of 275,000. Quarterly begins are forecast to fall to 218,000 (seasonally adjusted annual charge) in each Q3 and This autumn—marking the bottom tempo because the early pandemic.
In the meantime, many condominium tasks launched over the previous 12 months or extra are nonetheless finishing, including additional provide to an already cooling market.
“The condominium market proper now could be a multitude,” stated Tony Stillo, Director, Canada Economics. “Costs of items should fall with a view to transfer, and meaning traders might should take a loss.”
Affordability, too, stays an enormous hurdle, notes Stillo. “We’re listening to increasingly more stories of patrons leaning on household funds to satisfy down fee necessities.”
Commerce dangers add to mounting financial uncertainty
Whereas the housing slowdown is a key point of interest, Oxford Economics additionally emphasised the mounting macroeconomic dangers tied to escalating commerce tensions between Canada and the U.S.
Exports to the U.S. have dropped considerably, with whole items exports falling roughly 10% month-over-month in April, and solely partially rebounding in Could. Mixed with tariff-driven value pressures and a slowdown in shopper spending, Oxford is forecasting a contraction in Canadian GDP by way of the second half of 2025.
Davenport famous that whereas Canadian items are receiving considerably of a reprieve on account of continued USMCA compliance, the specter of a brand new tariff flat charge of 35%, with probably extra on key sectors together with metals and prescribed drugs, stays a significant concern.
Towards this backdrop, Oxford says the Financial institution of Canada has restricted room to manoeuvre, with charges already hovering close to what it considers the impartial stage. “Even when they had been to chop charges, 1 / 4 level to half level can be as a lot as we might see,” Stillo stated.
From tariffs to defence: Key forces driving Canada’s economic system
Past home market pressures, Canada’s financial outlook is more and more formed by its worldwide ties and world coverage shifts.
Oxford described the continued commerce struggle as being at a crossroads, with the potential for a deal by July 21 or a shift towards extra “managed commerce,” as Stillo put it. “If a deal isn’t reached, we’re speaking about fairly a major hike in tariffs.”
In the meantime, the agency expects extra particulars on the Liberal authorities’s plan to extend defence spending to emerge within the fall, possible as a part of a federal funds or fiscal replace. “Till then, our forecast assumes this can be deficit spending,” Stillo added.
Requested about Canadians’ urge for food for worldwide journey, Stillo stated the present pullback is probably going momentary. “We’re hoping that that is short-lived—both a 12 months and a half till the USMCA overview in 2026, or maybe till the top of Trump’s time period,” he stated. “Long run, this lower in journey would harm the U.S. in addition to Canada, even when we transfer to a extra managed commerce situation.”
Contemplating Canada’s various commerce choices within the wake of continued U.S. tensions, Stillo famous that whereas there could also be alternatives to increase commerce with nations like China and India, in addition to the EU, these efforts include their very own dangers and delays. Power exports may play a key position right here, however crucially any broader diversification will take time, he stated.
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Final modified: July 22, 2025
