The number of national housing sales declined for a fifth consecutive month in March, edging down by 0.1% seasonally adjusted (SA) from its February level, while it declined by 2.3% non-seasonally adjusted (NSA) since March 2025, said Scotiabank.
From February to March, sales declined in 17 of the 31 local markets the bank tracks.
Also, national new listings edged down by 0.2% SA between February and March and posted a 4.9% NSA decline since March 2025.
Scotia cited as factors at play: upward pressures on housing demand due to lagged effects from the decline in mortgage rates since their recent peak in mid-2024; economic and income uncertainty from the increased trade tensions since early 2025; and the war in Iran in recent weeks.
Scotia said the assumption about the Middle East war is that tensions will ease in about mid-2026, with oil prices remaining high through Q3 of this year and gradually declining after. Scotiabank expects a "mild" recovery in housing demand and prices.
However, the bank added, this is a working assumption and not a forecast for the situation in Iran and in the Middle East, noting there are substantial upside risks in terms of the duration of the conflict and its impact on oil prices.
If this duration turns out longer and oil prices are higher than assumed in the bank's outlook, the resulting impact on income uncertainty for potential buyers will slow housing demand further, delaying the expected recovery in housing demand and prices, Scotia said. These housing demand headwinds would be exacerbated if the situation in the Middle East creates inflationary pressures strong enough to raise interest and mortgage rates by requiring tighter policy rates and/or leading investors to demand higher yields on longer-term maturity debt instruments, it added.
As a consequence, given that trade and geopolitical conditions haven't really changed since, Scotiabank continues to forecast that a "material" and sustained recovery in housing demand and prices won't happen this year.