Trade War Update: Navigating the Canadian Real Estate Market in Uncertain Times

Good Morning,

Welcome to the March 17, 2025 edition of RealEdge, your go-to source for Canadian real estate insights. As we step into the spring market, a key factor influencing our industry remains the ongoing trade tensions between the United States and Canada.

These economic shifts continue to impact construction costs, inventory levels, and buyer confidence, making strategic planning essential for anyone looking to buy, sell, or invest this season.

📌 In Today’s Newsletter:

• Recent Trade War Developments

• Impact on the Canadian Real Estate Market

• Spring Market Outlook

• Strategies for Buyers, Sellers, and Investors

• Regional Market Updates

Need expert advice? Book a consultation at here to make informed real estate decisions.

🌍 Recent Trade War Developments

Since our last update, several key events have unfolded:

• The U.S. has maintained its 25% tariff on Canadian steel and aluminum, and 10% tariff on energy products, driving up costs in key industries.

• Canada’s retaliatory tariffs remain in place, affecting construction materials, consumer goods, and agricultural imports.

• Trade negotiations have stalled, with no resolution expected before mid-2025, prolonging economic uncertainty.

These developments continue to ripple through the real estate sector, affecting housing affordability, supply chains, and investment trends.

🏡 Impact on the Canadian Real Estate Market

The ongoing trade tensions are shaping market conditions in several ways:

• Construction Costs Up – The cost of building materials has risen 12% year-over-year, making new builds more expensive.

• Housing Supply Down – New housing starts have dropped 8%, reducing inventory and pressuring prices in key markets.

• Weaker Consumer Confidence – Buyer sentiment has declined by 5%, as economic uncertainty slows purchasing decisions.

• Foreign Investment Increasing – Despite trade challenges, foreign investment in Canadian real estate is up 7%, partly due to a weaker Canadian dollar making assets more attractive to global investors.

📈 Spring Market Outlook

Spring is traditionally the busiest season in real estate, but economic uncertainty is shifting market dynamics.

• Sales Volume – Expected to be 5% lower than in spring 2024, as buyers take a cautious approach.

• Price Growth – Home prices are projected to see a modest 1–2% increase, staying relatively stable.

• Inventory Levels – A slight rise in available listings offers more choices for buyers than last year.

• Mortgage Rates – Holding steady around 4.75% for 5-year fixed terms, making financing decisions more predictable.

Despite these challenges, the right strategy can lead to great opportunities for those entering the market.

🔑 Strategies for Buyers, Sellers, and Investors

For Buyers:

• Leverage increased inventory – More choices mean better negotiating power in certain markets.

• Consider properties that need updates – Homes requiring renovations may offer better long-term value as construction costs rise.

• Get pre-approved early – Securing mortgage pre-approval now ensures you’re ready to move quickly in competitive situations.

For Sellers:

• Price competitively – Overpricing could result in longer listing times in this market.

• Highlight energy-efficient features – With rising utility and maintenance costs, buyers are looking for cost-saving benefits.

• Be flexible with showings – Buyers are more selective, so accommodating their schedules can increase your chances of a sale.

For Investors:

• Focus on rental properties – With homeownership affordability declining, rental demand remains strong.

• Look beyond major cities – Secondary markets with stable job growth may offer better appreciation potential.

• Explore commercial opportunities – Logistics, warehousing, and mixed-use developments remain strong investment areas despite trade tensions.

📍 Regional Market Updates

Greater Toronto Area (GTA)

• Market remains resilient, with a 2% year-over-year price increase, despite higher borrowing costs.

• Inventory is up slightly, giving buyers more options compared to 2024.

Vancouver

• Experiencing a slight cooling, with prices down 1% year-over-year.

• Condo demand remains strong, but detached homes are seeing longer days on market.

Montreal

• Continues to see steady growth, with a 3% price increase and strong local demand.

• The rental market is tightening, creating more investor interest in multi-family units.

Calgary

• After an initial dip due to energy sector uncertainty, sales volume has rebounded 4% month-over-month.

• The market is stabilizing, with affordable entry points compared to other major cities.

Atlantic Canada (Halifax, Moncton, St. John’s)

• One of the strongest markets in Canada, with Halifax leading at a 6% year-over-year price increase.

• Buyers seeking affordability and lifestyle-driven relocations continue to fuel demand.

📌 Final Thoughts

As we navigate economic uncertainty and shifting market conditions, strategic planning will be key to success in spring 2025.

• Buyers – Take advantage of rising inventory and consider homes with renovation potential.

• Sellers – Price strategically and market energy-efficient features to attract cost-conscious buyers.

• Investors – Look into rental markets and commercial real estate for long-term stability.

Despite the ongoing trade war’s challenges, opportunities exist for those who adapt to market shifts.

For expert guidance tailored to your real estate goals, book a consultation here today.

📢 See You Next Week!

Stay tuned for our next issue.

The RealEdge Team