Beyond Toronto, housing markets across Southern Ontario are experiencing some of the steepest price declines in the country, as economic uncertainty and trade tensions take a growing toll on buyer confidence.
Areas like Hamilton-Burlington, Niagara, and Kitchener-Waterloo are feeling the brunt of a market downturn driven by fears over tariffs. While the Greater Toronto Area has long been the focus, the softest conditions are now spreading outward into regions more vulnerable to external shocks.
Tariffs and trade uncertainty are weighing heavily on communities with deep industrial roots. In Hamilton, the threat of new steel tariffs has hit confidence in both business and housing markets. Similar pressures are being felt in Windsor, Niagara, and other parts of Ontario that rely heavily on manufacturing and cross-border trade.
“Hamilton is the poster child for the impact of steel tariffs,” said Benjy Katchen, CEO of RPS Real Property Solutions and real estate platform Wahi. “We’re seeing the same sentiment-driven slowdown across much of Southern Ontario.”
With new tariff threats potentially arriving by Aug. 1, the housing market remains stuck in limbo.
“Often, uncertainty is worse than bad news,” Katchen said. “Businesses can’t plan, investors don’t know where to allocate capital, and companies aren’t sure where or how to sell their products. Once we get clarity—regardless of the direction—I believe we’ll see the market start to rebound.”
Price pressures
According to the latest data from the Canadian Real Estate Association (CREA), prices in June were down 7.5 per cent year-over-year in Kitchener-Waterloo and fell annually by 5.8 per cent in the Niagara Region and 8.7 per cent in Hamilton-Burlington.
As home prices continue to slide across Southern Ontario, industry leaders point to a potent mix of local oversupply and global uncertainty as the driving forces behind the downturn. CREA data indicates prices in the Greater Toronto Area fell by 5.6 per cent year-over-year in June while they were down 4.8 per cent in the Greater Vancouver Area.
“In Toronto, it’s a condo-specific issue,” said Katchen. “Tariffs are affecting national confidence a bit, but Toronto is mainly about condos.”
According to Katchen, both Toronto and Vancouver have seen the most pronounced price declines, but the nature of the downturn is concentrated in high-density housing. “Detached and semi-detached markets in the GTA and Greater Vancouver are holding up relatively well. But condos—there’s a real overhang right now.”
That overhang is driven by an influx of inventory. A flood of units has entered the market at the same time that demand is weakening, due in part to high financing costs and a slight dip in immigration. Adding to the pressure: many of these condos were purchased by investors now grappling with negative cash flow.
Trade fears dampened market optimism
While the GTA’s challenges stem largely from the condo sector, the rest of Southern Ontario is grappling with a different kind of stress—one rooted in uncertainty over trade and tariffs.
According to Robert Hogue, assistant chief economist with RBC, the combination of high interest rates and lingering trade-related uncertainty has eroded confidence and left the market in a prolonged slump.
“Things are very soft,” Hogue said. “It’s a market that has corrected significantly since the Bank of Canada began raising interest rates back in June of 2022.”
While the initial rate hikes triggered a swift decline in prices and activity, the market appeared to stabilize briefly when the Bank paused its tightening cycle just over a year ago. But any momentum that had started to build was quickly dampened by global economic uncertainty—particularly concerns surrounding trade tensions.
As resale activity stalled, inventory levels rose sharply, pushing the region into a clear buyer’s market. “Prices are declining—not collapsing—but they are coming down,” Hogue explained.
Asked whether Southern Ontario is now the softest housing region in the country, Hogue responded: “Probably.”
While B.C. has also seen declines, the magnitude in Ontario has been more pronounced. Still, he noted that the correction follows a period of massive price escalation during the pandemic.
“Not everyone is disappointed to see prices come down. A lot of potential homebuyers who had been shut out of the market are probably seeing these declines as a good development.”
Affordability, however, remains highly strained. Despite the recent correction, prices are still elevated in historical terms, especially in the GTA and nearby cities. “This is part of the process of reversing the deterioration in affordability that occurred during the pandemic,” Hogue said, adding that he expects the softness to persist for the near future.
Tariff impacts are ‘clearly playing a role’
Another factor weighing on the region is tariff-related uncertainty, particularly in industrial hubs like Windsor, Hamilton, and Kitchener-Waterloo. “Those areas are much more vulnerable to trade-related shocks,” Hogue said. “Confidence in those regions has been significantly affected.”
Chris Jokel, Senior Data Engineer at CREA, said a mix of tariff-related uncertainty, rising inventory, and long-standing affordability challenges is driving the current downturn.
“What we’re seeing right now is that the relatively most unaffordable or expensive areas of the country are experiencing the largest price declines,” Jokel said. That trend is particularly clear in Ontario’s Greater Toronto Area (GTA) and across the Golden Horseshoe, mirroring similar weakness in British Columbia’s Lower Mainland.
Sales activity and pricing have both taken a hit in recent months, but CREA’s data points to especially sharp declines in parts of Southwestern Ontario.
“Windsor is currently experiencing the lowest sales activity in about 12 years,” Jokel said. “At the same time, it’s facing extremely high new listings and overall inventory. The tariff impacts are clearly playing a role, especially with Windsor’s economy being so closely tied to the auto sector.”
And the RPS-Wahi House Price Index for June indicated that home sales in Hamilton sunk to a 15-year low for the month.
Jokel explained that while CREA doesn’t forecast at the local level, their provincial outlook for Ontario has recently been revised to reflect the growing uncertainty. “Originally, for this year, we forecasted about a four per cent decline in sales. That’s since been revised downward to just under nine per cent,” he said.
The volatility stems in part from shifting U.S. trade policy.
As the year unfolded, some markets showed tentative signs of stabilization. “We were seeing the early indicators—or ‘green shoots’—of a turnaround,” Jokel said. “It was too early to call it a recovery, but the data suggested that some markets had bottomed out.” However, that momentum may now be at risk.
More tariffs threaten a rebound
With another round of tariff threats looming ahead of Aug. 1, Jokel cautioned that the rebound could be derailed. “If those tariff increases move from 25 per cent to 35 per cent, that will likely dampen both economic and housing activity. It could also damage consumer confidence. People might think, ‘If tariffs can jump from 25 per cent to 35 per cent arbitrarily, what’s stopping them from going even higher later?’”
Another new normal?
Phil Soper, CEO of Royal LePage, said that although prices in some secondary Ontario markets may appear more affordable compared to Toronto, they are still quite high relative to national averages.
“People don’t always realize it, but even though home prices seem cheaper in a place like Barrie compared to Toronto, they’re actually more expensive than in a city like Calgary,” he explained.
The ongoing uncertainty around tariffs and American trade policy continues to weigh on the market, especially in regions reliant on manufacturing.
Soper emphasized that Canadians are starting to adjust to what he calls the “new normal” of trade tensions, comparing the current situation to the pandemic period when people adapted to ongoing challenges. “People are beginning to tune out the daily barrage from the White House because it doesn’t seem to be affecting their day-to-day lives,” he said.
Ultimately, Soper believes the biggest hurdle for the housing market right now is psychological rather than structural. “It’s about how people feel. They don’t feel confident making big investments. But that will pass,” he concluded.
Mario Toneguzzi is a contributing writer for REM. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He now works on his own as a freelance writer for several national publications and consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list.