The imposition of a 25% tariff on imported goods could significantly affect Canada’s housing market, especially as construction costs rise. Developers, faced with higher expenses, are likely to pass these costs onto buyers, resulting in increased housing prices. This situation may worsen the city’s already strained affordability crisis.
With fewer new homes being constructed due to elevated costs, the supply of available properties could shrink. This scarcity could lead to inflated prices in the resale market, further straining those seeking homeownership.
Beyond the direct impact on construction and real estate, the 25% tariff is expected to have broader economic consequences that could influence the housing market in less obvious ways. The increased cost of imported goods and services could result in higher prices across various sectors, putting additional pressure on household budgets. With less disposable income available, consumers may delay or forgo purchasing homes, leading to decreased demand and possibly cooling the market in the long run.
Sectors that rely heavily on U.S. exports, such as automotive and manufacturing, could experience reduced profitability due to the higher costs associated with tariffs. As these industries struggle, job losses may follow, further dampening economic activity and potentially decreasing the pool of buyers able to enter the housing market.
We are already experiencing the effects of economic uncertainty as Guelph’s, usually hot, spring real estate market is colder than the weather. Sales for March were down 46% from the same time last year. The number of homes that sold over asking price was down 15% and the average time on market for MLS sales increased 17% to 27 days. The number of listings that were terminated without being sold was up over 50% from last March as well. Going into April, there are over 400 active listings for sale in the city of Guelph. That represents 3 months worth of inventory.
We have yet to feel the real consequences the of the anticipated tariffs but the economic uncertainty created by the mere threat of tariffs is already having a significant effect on our local real estate market.
