The long-rumored tariffs between the U.S. and Canada are officially here, and the economic impact is already being felt. Overnight, the U.S. imposed a 25% tariff on Canadian goods, alongside a 10% tariff on energy products like oil, electricity, and minerals such as aluminum. In response, Canada hit back with a 25% retaliatory tariff on U.S. imports.
While these tariffs will affect a broad range of industries, one major question remains: How will this impact Vancouver’s real estate market?
One of the biggest takeaways from this tariff war is BMO’s prediction that interest rates could drop to 2% by July. Lower rates make borrowing more affordable, which typically drives more buyers into the market.
On the flip side, the new tariffs could have a significant impact on the cost of building new homes. A 25% tariff on steel and aluminum, plus a potential 25% tariff on international lumber, means that everything from high-rise developments to single-family homes could become more expensive to build.
For developers, rising costs may lead to delayed projects or reduced housing supply, putting even more pressure on an already tight market. The big question is whether the drop in interest rates will be enough to offset rising construction costs—or if it will simply create a more challenging market for builders and buyers alike.
With these competing factors at play, it’s tough to say exactly how Vancouver’s real estate market will respond. Lower interest rates could fuel demand, while higher construction costs might limit supply—potentially keeping the market hot for sellers. But if affordability worsens, government intervention or policy changes could shift the landscape yet again.
This is not an offering for sale. Any such offering may be made only with a disclosure statement. Prices and specifications are subject to change. E.&O.E. Not intended to breach or induce any existing client relationships. This is not legal advice, recommended to seek independent legal advice.
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While these tariffs will affect a broad range of industries, one major question remains: How will this impact Vancouver’s real estate market?
Lower Interest Rates Could Boost Buyer Demand
For Vancouver, where high prices have kept some on the sidelines, this could be the push that brings more buyers back into action. But a surge in demand isn’t necessarily good news for everyone. With an already competitive market, lower rates could fuel bidding wars and push home prices even higher—a concern for first-time buyers trying to break into the market.
Construction Costs Are Set to Rise
For developers, rising costs may lead to delayed projects or reduced housing supply, putting even more pressure on an already tight market. The big question is whether the drop in interest rates will be enough to offset rising construction costs—or if it will simply create a more challenging market for builders and buyers alike.
Will the Market Boom, Bust, or Balance Out?
This is not an offering for sale. Any such offering may be made only with a disclosure statement. Prices and specifications are subject to change. E.&O.E. Not intended to breach or induce any existing client relationships. This is not legal advice, recommended to seek independent legal advice.