Canadian real estate declined sharply in February 2025, causing a major impact on the economy and what can Vietnam learn from this fluctuation?
Canada’s real estate market suffered a sharp decline in February 2025, with home sales falling by the most in nearly three years. Factors such as trade wars, economic uncertainty and fiscal policy have kept many buyers on the sidelines and not making large purchases amid financial uncertainty. This raises a number of questions about how the real estate market can affect the economy and what lessons Vietnam can learn from this volatility.
Sharp decline in home sales
According to information from the Canadian Real Estate Association (CREA), in February 2025, home sales in Canada fell sharply by 9.8% compared to January, the largest decline since May 2022. At the same time, home sales fell by 10.4% compared to the same period last year. This decline not only reflects buyers' concerns but also shows the difficulty in maintaining stable growth in the real estate market in the context of global and domestic economic factors.
This is partly due to economic uncertainty, particularly the effects of trade wars and other geopolitical factors. This volatility has made consumers and investors more cautious when making major financial decisions such as buying a home.
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| In February 2025, home sales in Canada fell sharply by 9.8% compared to January, the largest decline since May 2022. Illustration photo |
In addition to the decline in home sales, the home price index also saw a slight decline. The industry’s home price index fell 0.8% in February, and was down 1% year-on-year. This reflected a market correction after a period of strong growth. Furthermore, the national median selling price fell 3.3% year-on-year, indicating that the decline was not small, especially for those looking for real estate investment opportunities.
This price adjustment not only reflects a cooling market, but also demonstrates that global economic factors, such as inflation and rising interest rates, have made buyers more cautious. Homebuyers may face higher costs, reducing their affordability and influencing their decision to buy a home.
The housing market was not spared from the downturn. Housing starts fell 4% in February from the previous month to 229,030 units, below economists’ forecasts of 250,000 units. This suggests that weakening housing demand and economic uncertainty have impacted decisions to build new homes.
This decline will have a lasting impact on supply and demand in the real estate market, especially when limited supply occurs while housing demand remains high. This is a factor that investors and long-term housing development policies need to consider.
Lessons for Vietnam
The Canadian real estate market, through its recent sharp decline, has offered some important lessons that Vietnam can learn:
First, invest carefully and manage risks: The Canadian real estate market has seen a sharp decline due to unstable global economic factors, such as trade wars, rising interest rates and geopolitical issues. This has shown the importance of carefully assessing the impact factors before investing in real estate. Vietnam should also be cautious in investing in this market, especially when financial and economic factors fluctuate greatly. Building a reasonable investment strategy, with risk allocation and careful calculation is extremely necessary to avoid serious losses.
Second, be cautious in making a home purchase decision: The Canadian situation shows that economic uncertainties, such as fluctuations in interest rates, credit policies and government regulatory measures, can have a strong impact on buyers' decisions. Therefore, people and investors in Vietnam also need to pay attention to macroeconomic factors that can affect the real estate market, such as bank interest rates and government financial management measures. The decision to buy a home should not be hasty, but should be based on fundamental factors and a thorough analysis of the economic situation.
Third, the impact of fiscal policy: Fiscal policy, especially interest rate policy, plays an important role in regulating the real estate market. In the Canadian market, the increase in interest rates has contributed to reducing the demand for home purchases, because buyers face higher borrowing costs. This is also an important lesson for Vietnam in formulating fiscal policies. Interest rate policy needs to be carefully considered to avoid reducing buyer demand while still ensuring the stable development of the real estate market.
Fourth, sustainable development: Finally, the decline in the Canadian real estate market shows the need to build a sustainable real estate market. A sustainable market requires a balance between supply and demand, avoiding prices being pushed too high by speculative factors. Vietnam can learn from these experiences to develop a stable real estate market, ensuring long-term value without being dominated by short-term factors or impacted by unpredictable economic fluctuations.
| The Canadian real estate market, after a sharp decline, has provided valuable lessons for Vietnam, helping it to be aware of fluctuations and adjust its strategies accordingly. Vietnam can learn from these experiences, especially in risk management and developing a sustainable and stable real estate market. |
Source: https://congthuong.vn/bat-dong-san-canada-xuong-day-3-nam-va-bai-hoc-cho-viet-nam-378814.html
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