February 2025 brought a noticeable shift in the Canadian housing market, as a combination of U.S. trade war anxieties and some good old-fashioned Canadian winter weather put a damper on the early-year optimism. This report, drawing on the latest data from local real estate boards, including the Association of Interior REALTORS®, and RBC Economics, dives into what happened and what it might mean for the coming months. Across the country, home sales took a tumble from January to February. Toronto felt the biggest impact, with transactions plummeting to a new low for the current market cycle. It wasn't just Toronto, though – Vancouver, Fraser Valley, Calgary, and Montreal all saw significant declines in activity. It seems that both economic uncertainty and snow shovels kept potential homebuyers at bay.

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More Choice for Buyers, More Negotiating Power

One positive outcome of the slowdown is that buyers now have more options. Thanks to a surge in new listings in January, the selection of available homes is wider than it's been in years, especially in Vancouver, Fraser Valley, and Toronto. This has created a clear shift, putting buyers in the driver's seat when it comes to negotiations.

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Prices Soften Under Pressure

The increased inventory and decreased demand are having a predictable effect: property values are starting to soften. The MLS Home Price Index (HPI), a key measure of market prices, is down year-over-year in Vancouver, Fraser Valley and Toronto. In Toronto, the HPI experienced its most significant monthly drop in 15 months, a clear sign that the market is responding to the changing conditions. While most major markets cooled off, Edmonton continued to show some strength. Prices are still rising there, although even Edmonton isn't completely immune to the broader slowdown. It's a reminder that local factors can still play a significant role, even amid national trends.

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The Elephant in the Room

The biggest unknown hanging over the market is the U.S.-initiated trade war that began in March 2025. This dispute, involving Canada, Mexico, and China, is a major source of uncertainty. It's already impacting market confidence, and a prolonged trade battle could significantly affect buyers' plans and potentially quiet the usually busy spring market.

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Key Market Metrics

Let's break down some of the key numbers from the February 2025 report:

• Home Resales: Down across the board. Toronto's -27% annual change is particularly striking.
• New Listings: A mixed bag. Some areas saw declines (Vancouver, Fraser Valley), while others saw increases (Calgary, Edmonton).
• Sales-to-New Listings Ratio: This ratio is a good indicator of market balance. Numbers are shifting towards a buyer's market in many regions, especially Vancouver (0.37) and Fraser Valley (0.33).
• Active Listings: Up significantly in most markets. Toronto (76.0% annual change) and Montreal (74.8%) saw huge jumps.
• MLS Home Price Index: Year-over-year declines in Vancouver (-1.1%), Fraser Valley (-3.6%), and Toronto (-1.8%). Calgary saw a small increase (0.9%), while Montreal's data for February was unavailable, but January showed a 6.5% increase.

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What's Happening on the Ground?

Toronto

Toronto's market experienced a dramatic downturn. The 29% seasonally adjusted drop in resales from January to February was the biggest since the early pandemic days and the lowest point of the current cycle. Increased listings are giving buyers leverage, and the MLS HPI is down both monthly and annually. The condo market is particularly soft. The potential for job losses and economic damage from the trade war adds another layer of concern.

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Montreal

Montreal wasn't spared, with an estimated 11% seasonally adjusted drop in transactions from January – the biggest in four years. This halted a strong rebound that had been underway. While the market is still relatively tight, conditions are easing. Prices are still up year-over-year, but a slowdown is expected, and the trade war could accelerate it.

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Vancouver

Vancouver's market recovery hit a snag, with resales falling over 15% (seasonally adjusted) from January. This reversed the gains of the previous six months. The market is now well-supplied, and prices are under mild downward pressure. The condo segment is weaker, while detached homes are showing slight appreciation. Affordability remains a major challenge, and the trade war adds to the uncertainty.

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Calgary

Calgary's market also experienced a slowdown, with a roughly 12% (seasonally adjusted) dip in resales from January. Increased inventory has created a more balanced market, and price growth has slowed significantly. Further cooling is expected as the trade war weighs on the economy.

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Kelowna

In the Kelowna area (Central Okanagan), the market presented a mixed picture. While new listings remained relatively flat year-over-year (up just 0.39%), the number of units sold increased by 14.18%. However, a significant 22.22% rise in active listings suggests that supply is starting to outpace demand. The sales volume saw a substantial increase of 41.03% year-over-year, indicating that higher-priced homes are driving market growth. The market is tilting slightly towards buyers, particularly with the growing inventory.

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Conclusion

The February 2025 data clearly shows a Canadian housing market in transition. The confluence of trade tensions, increased inventory in many markets, and a general cooling of buyer enthusiasm has created a more cautious and complex environment. While some regions, like Edmonton, are showing resilience, and others, like Kelowna, present a mixed picture, the overall trend is towards a slower, more balanced market. This is precisely where the expertise of Coldwell Banker Horizon Realty becomes invaluable. As your local real estate professionals, we understand the nuances of the Okanagan market, including the specific factors influencing Kelowna and its surrounding areas. Whether you're considering buying or selling, our team is equipped to provide you with the most up-to-date market analysis, personalized advice, and strategic guidance to help you achieve your real estate goals. Don't navigate these uncertain waters alone. Contact Coldwell Banker Horizon Realty today for a consultation, and let us help you make informed decisions in this evolving market.

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Source: RBC