1 week Ago By Joel Schlesinger, for the Calgary Herald
Reviews and recommendations are unbiased and products are independently selected. Postmedia may earn an affiliate commission from purchases made through links on this page. The past may not repeat itself, but it can be instructive of what to expect regarding the impact of tariffs on Canada’s housing market.
To that end, national realty firm Zoocasa published a report examining the 2018 tariffs imposed by then-President Donald Trump and his administration on Canadian steel and aluminum exports to the United States. These levies were more limited in scope than the 25-per cent across the board tariffs threatened presently on all Canadian exports to the U.S.
with the exception of oil — which will face a 10 per cent tariff. Yet the experience may offer some sense of how buyers and sellers may react in the months ahead. Home sales did decline on a monthly basis for several months in 2018 before rebounding gradually in 2019 before tariffs were lifted in May.
When the taxes on Canadian exported steel and aluminum were first announced in March 2018, the Canadian housing market saw a surge in sales month over month, up nearly 34 per cent for that month. Sales continued to climb until June — the month tariffs were actually implemented. Afterward, activity declined in the six out of the seven months that followed.
Sales recovered percentage-wise month over month at the start of 2019 until May when tariffs were lifted. At the low point — December 2018 — Canada saw only about 22,000 sales, Zoocasa’s study further noted. By May 2019, activity had more than doubled with nearly 54,600 sales.
Prices, however, remained relatively stable amid the trade strife. The aggregate price of a home in Canada ranged between about $472,000 in December 2018 to as high as nearly $529,000 in November 2019 about six months after tariffs were imposed. The report notes that this recent round of tariffs is different with an expected wider negative impact on the economy.
Yet the housing market’s resiliency should not be overlooked, it added. More supply is on the market today in major cities, and rates are expected to fall —though likely not to levels in 2018 when the overnight Bank of Canada rate was 1.75 per cent.
Today, the central bank’s overnight rate is three per cent. Still, changes allowing for longer amortizations and purchase price increases for mortgage insurance, combined with lower borrowing costs and more supply, could help buoy Canada’s market in a trade war environment, it posited..
