P.E.I. sees uptick in home sales in February, despite downward national trend

Prince Edward Island stands out from the rest of the country as it experienced a surge in home sales last month, contrary to the national trend. According to data from the Canadian Real Estate Association (CREA), total sales activity in February on the island rose by 10 per cent compared to January. Additionally, there was a significant increase of 7.7 per cent in total residential and non-residential sales in February 2025 compared to the same period in 2024.

Shaun Cathcart, a senior economist at CREA, highlighted that smaller, more affordable places like Prince Edward Island have fared better during this time of uncertainty. The uncertainty he refers to stems from the inauguration of former U.S. President Donald Trump on January 20 and his subsequent threats to impose tariffs on various Canadian goods. This led to a nationwide decline in home sales, with Canada seeing a 9.2 per cent month-over-month decrease and a 9.7 per cent drop from February 2024 to 2025.

Cathcart emphasized that prolonged trade wars could have a significant impact on the housing market, causing potential buyers and sellers to delay their decisions. He noted that uncertainty creates hesitation in making long-term commitments, despite the strong demand resulting from record population growth in recent years.

The economist also mentioned another possible factor contributing to the increase in home sales on Prince Edward Island – interprovincial migration, particularly from provinces like Ontario and British Columbia. Homeowners from these regions, who have sold their properties at higher prices, may seek more affordable markets like P.E.I. to make their next purchase.

While the boost in home sales benefits existing property owners looking to sell, it may pose challenges for young individuals in search of affordable starter homes. The influx of buyers from pricier regions could reduce the relative purchasing power of local residents, making it more challenging for them to enter the housing market.

Cathcart proposed a potential solution to this issue – lowering interest rates by the Bank of Canada. By reducing interest rates, more people could afford to buy homes in their respective provinces, alleviating some pressure on smaller markets like Prince Edward Island. However, the economist highlighted that U.S. tariffs and trade wars could complicate this strategy, as they often lead to increased inflation, prompting central banks to raise interest rates to control it.

In conclusion, while Prince Edward Island’s housing market has shown resilience and growth amid national challenges, the broader economic landscape and policy decisions will play a crucial role in shaping the future trajectory of the real estate sector on the island and across Canada.