T
he Toronto-area real estate market's tentative recovery has been eclipsed by a fresh wave of uncertainty. As listings surge in February, buyers are hesitating, industry insiders say. The looming threat of hefty tariffs on Canadian imports from the US, courtesy of President Donald Trump, is casting a shadow over the market's nascent optimism.
According to John Pasalis, president of Realosophy Realty, sellers are plentiful but buyers are holding back, resulting in a sluggish market. "It's like they're waiting for something to happen," he says. The anxiety surrounding tariffs has overshadowed the positive signs that emerged earlier, including a 10% increase in sales in January compared to December on a seasonally adjusted basis.
Active listings have ballooned by 70% last month from January 2024, while new listings soared 26% from December to January, reaching their highest level since March 2021. Despite looser market conditions, prices remained flat from month-to-month. Pasalis notes that buyers had begun to jump back into the market in October and November, betting on further interest rate cuts and a potential run-up in prices in the spring.
However, Pasalis cautions that some sellers are overly optimistic about the market's prospects. "Even if you're priced well, it will take longer," he warns. He attributes the current sluggishness to the uncertainty surrounding tariffs, which has caused buyers to slow down their decision-making process.
Pritesh Parekh, a real estate agent with Century 21 Legacy Ltd., echoes Pasalis' sentiments. The optimism he sensed from buyers at the beginning of January has given way to uneasiness due to the tariff fight. "What does this mean to me? Does it mean anything at all?" is a common sentiment among buyers.
Farah Omran, senior economist at Bank of Nova Scotia, notes that uncertainty will continue to plague economic forecasts in 2025, with tariffs and Canada's retaliation strategy being key factors. The national housing market has remained balanced, with stable prices, but the unpredictability surrounding these issues will likely persist.
