How the US Presidency Could Impact the Canadian Real Estate Market
With Donald Trump returning to the White House, Canadians are watching closely to see how his policies will affect trade, the economy, and real estate. While the full impact will take time to unfold, here’s how his presidency could shape Canada’s housing market.
1. Tariffs and Rising Construction Costs
An immediate concern is Trump’s proposed tariffs on imports, including Canadian goods. If tariffs on materials like lumber, steel, and aluminum increase, building costs will rise, putting pressure on new home prices.
Impact on buyers: Higher construction costs could lead to fewer homes being built, worsening the supply shortage and driving up prices.
Impact on sellers: Home values may increase due to demand, but higher borrowing costs from rising interest rates could limit buyer affordability.
2. Interest Rate Uncertainty
Trade tensions and economic shifts under Trump could put upward pressure on inflation, leading central banks, including the Bank of Canada, to adjust interest rates. If rates rise:
Mortgage payments could become more expensive, making homeownership harder for first-time buyers.
The housing market could cool down, as higher rates reduce borrowing power.
Variable-rate mortgage holders would feel the strain, as their payments increase.
3. A Weaker Canadian Dollar and Foreign Investment
If Trump’s trade policies create economic uncertainty, the Canadian dollar could weaken against the U.S. dollar. While this makes imported goods like construction materials more expensive, it could also make Canadian real estate more attractive to foreign investors.
Who benefits? International buyers may see Canada as a more affordable option, particularly in cities like Toronto and Vancouver, where foreign investment has historically played a role in rising home prices. However, with the Federal Foreign Buyer Ban in place until January 1, 2027, the incoming Prime Minister will need to reassess whether this legislation remains a good option for Canadians.
Who loses? A weaker dollar also means everyday Canadians may have less buying power, making it harder to save for a down payment.
4. Increased Demand from Americans Moving to Canada
Whenever there’s a major U.S. election, there’s talk of Americans moving to Canada. In past elections, searches for Canadian real estate have surged when Trump was elected. If political uncertainty in the U.S. increases, we could see:
More U.S. buyers entering the Canadian market, particularly in cities close to the border.
Increased demand in luxury and high-end real estate, as wealthy Americans look for second homes or investment properties.
More competition for Canadian buyers, particularly in desirable urban centers.
As detailed above, with the Prohibition on the Purchase of Residential Property by Non-Canadians Act in place until January 1, 2027, the possibility of Americans flocking to Canada and scooping up all the Canadian real estate market is unlikely; at least until there is legislative change put forth by lawmakers.
5. Economic Uncertainty and Market Sentiment
Trump’s policies on trade, taxation, and business regulations could create economic shifts that impact job security, wages, and consumer confidence in Canada. If uncertainty rises:
Buyers may delay purchases, fearing job losses or economic downturns.
Sellers may hold off on listing, waiting for more stability.
Real estate investment may slow down, as investors assess risks.
What’s Next for Canadian Real Estate
While Trump’s policies will take time to unfold, Canadian buyers, sellers, and investors should stay informed and be prepared for shifts in the market.
For buyers: Lock in lower mortgage rates while you can and watch for changes in housing supply.
For sellers: Understand how changing demand and affordability may affect your home’s value.
For investors: Keep an eye on policy changes that could create new opportunities or risks.
The U.S. presidency will shape the Canadian economy, but real estate remains a strong long-term investment. Whether you're buying or selling, being informed is your best strategy.