Canadian home buyers remain cautious amid ongoing economic uncertainty, with many holding back due to concerns beyond their control, including the cost of living, unemployment fears, and geopolitical tensions. Joel Fox, chief operating officer of Ownright, a digital real estate platform, notes that both buyers and developers are stuck in a wait-and-see mindset, hindering a meaningful recovery.
Psychological Barriers Over Numbers
Fox emphasizes that the current slowdown is more psychological than numerical. “As long as these economic pressures continue to make people anxious, we won’t see a meaningful recovery,” he says. Falling home prices alone are insufficient to lure buyers back into the market, as external factors like U.S. tariffs and policy uncertainties weigh heavily on consumer confidence.
Housing Starts Decline
Data from the Canada Mortgage and Housing Corporation (CMHC) reveals that in March, the seasonally adjusted annual rate (SAAR) of housing starts fell six percent to 235,852 units compared to February’s 250,961 units. Mathieu Laberge, CMHC’s chief economist, attributes this to a continued loss of momentum in housing construction. While actual starts increased year-over-year, this reflects the exceptionally low activity in the first quarter of 2025.
Developer Hesitancy
Fox points out that many housing projects are not viable under current conditions. “Costs are high, financing is tight, and even where demand exists, developers are hesitant to commit due to the uncertain macroeconomic outlook,” he explains. The era of housing as a guaranteed investment appears over, with all stakeholders playing a waiting game. Activity persists mainly in the rental sector, but overall, the market is treading water.
Impact of Tariffs and Geopolitics
The uncertainty stemming from rising tariffs and geopolitical issues is increasingly burdensome for builders. “It just doesn’t make sense for them to commit to what they need to commit to in the world we are operating in right now,” Fox says. This uncertainty extends to home buyers, keeping the market in a holding pattern across most metrics.
Advice for Buyers and Sellers
Fox advises sellers to be cautious about the conditions they agree to in home sales, as buyers often seek escape clauses. Conversely, buyers are encouraged to build off-ramps into agreements. Ownright’s business fluctuates with market activity, but the firm is finding ways to grow despite lower-than-expected market conditions.
In summary, the Canadian housing market remains subdued as economic pressures persist, with recovery hinging on improved consumer confidence and reduced uncertainty.
