Like most segments of the economy, the housing market has been dented by U.S. President Donald Trump's barrage of tariffs on steel, aluminum and automobiles and Canada's own set of duties in retaliation.
Fears of job losses due to worsening business sentiment have dragged home buyers' confidence. That, along with increasing supply, has led to an around 3% decline in average house prices so far this year.
The Bank of Canada's swift 225 basis points of interest rate cuts over the past year have prevented a deeper slump. Also, sales were up last month partly due to improving affordability, mainly among first-time homebuyers.
Average home prices will fall 2.0% nationally this year, according to the June 13-25 Reuters poll of 16 housing market experts, in contrast to a prediction of a 2.0% rise in a March survey.
Average home prices are now expected to stagnate next year, compared to a 3.4% rise predicted just three months ago. Home prices in Toronto are predicted to fall 4.0% and 2.0% in Vancouver, respectively, in 2025.
Still, expected price falls are shallower compared with how much they have already been reported down so far this year, suggesting a modest recovery ahead. Expectations of at least one more rate cut this year may also put a floor under the market.
