Canadian buyers and sellers are increasingly holding back from the real estate market, driven by worries about U.S. political instability and recession risks that are denting consumer confidence, according to a recent industry survey.
The Ownright Operators Report, which gathered responses from more than 1,000 real estate professionals across Canada, found that 67 percent of respondents believe their clients are more risk-averse than they were before 2022.
Joel Fox, co-founder and chief operating officer of Ownright, the Ontario-based digital real estate law platform, said people transacting in the market today are more uneasy than in past cycles.
“When interest rates decline, you expect the market would pick back up,” Fox said. “It’s very interesting to see this environment where the decline in both average prices and interest rates has been happening and we’re not necessarily seeing the corresponding rebound of the market.”
Fox pointed to geopolitical factors that make buying and selling decisions more complex, and said his own business is seeing “a lot more hesitancy.” On the purchase side, clients are increasingly anxious that property values could fall before closing, which raises concerns about their ability to secure a mortgage or otherwise finance the purchase.
Cross-border uncertainty ripples through Canadian transactions
The survey underscores how U.S. economic and political conditions are affecting Canadian real estate choices. Nearly one in four professionals said U.S. instability frequently impacts transactions, while 69 percent reported it affects deals at least occasionally.
Broader economic uncertainty, including fears of a recession, topped the list of reasons clients hesitate, cited by 40 percent of respondents. That concern outpaced worries about employment or income stability (17 percent) and interest rates (15 percent).
Financing failures and indecision collapsing more deals
Financing failures are increasingly responsible for collapsed transactions: 34 percent of respondents identified financing failure as the leading cause, a rise from two years ago.
Client indecision is also a major source of delays. Thirty-eight percent of professionals called indecision the top reason for transaction delays, followed by financing and mortgage approvals at 28 percent.
Fox said the shift toward a buyer’s market is evident in how offers are structured, with conditions attached to many offers becoming far more common. “Those are used by buyers as an off-ramp on a deal if they don’t feel comfortable with it,” he noted.
When asked about mortgage guidance in the current climate, 41 percent of professionals recommended fixed-rate mortgages, while 30 percent favoured variable-rate products. Looking ahead, 43 percent of professionals said they are confident the market will rebound within 12 months, while 25 percent expressed pessimism.
Administrative burden pushing professionals toward the exit
The report also highlights rising strain from day-to-day regulatory and administrative demands. More than half of respondents — 56 percent — said compliance and paperwork are cutting into the time they can spend with clients.
Although only 10 percent reported losing income directly as a result, 30 percent said they have considered leaving the industry because of regulatory or administrative burdens.
At the same time, many professionals are experimenting with technology to manage this load. Six in 10 said they are using or testing AI-enabled tools, yet 28 percent believe the real estate transaction system remains fundamentally outdated, indicating that structural change has not kept pace with tech adoption.
Fox observed that most AI adoption so far has focused on marketing rather than the compliance and regulatory tasks that impose the greatest burden on professionals. “Perhaps it hasn’t gotten to a place where it’s relieved the burden as much as salespeople would hope it would,” he said.