Higher oil prices and the possibility of an interest rate hike in the coming months is having an impact on the real estate market.

At the beginning of the year, the Canadian Real Estate Association was expecting a lot of activity in the first few months – particularly from first time homebuyers who may have been holding off over the last few years due to inflationary pressures.

Those aspirations changed when the U.S. and Israel began its attack on Iran in February.

With oil prices skyrocketing, the Bank of Canada is warning of possible increases to its key lending rate which would mean a jump in fixed-mortgage rates.

CREA says that’s causing many buyers to hold off until the economy becomes more stable – meaning decreased activity in what is typically the busiest time of year for real estate.

The association says the average price of a home in Newfoundland and Labrador was nearly $345,000 in 2025 and is expected to increase to nearly $358,500 in 2026.

The national average home price in March was just over $673,000.