The Trump Effect
Despite widespread predictions to the contrary, Donald Trump pulled out a victory in the United States presidential election in November of last year. Given Trump’s sometimes-erratic nature, many people are understandably apprehensive about how his presidency might affect the economy and real estate markets not only in the United States, but in Canada as well.
Canada's Economic Ties to the US
Given Canada’s proximity and economic ties to the US, volatility in the American economy and stock markets will likely have some impact north of the border as well. When markets are unstable, investors become more hesitant to invest and hold back their money. Consequently, this slowing of investment may affect Canadian market.
Mortgage lenders take their cues from global bond rates set in New York, so distress in the US economy could result in higher lending costs for Canadian investors. Changes to trade agreements such as NAFTA could cause the price of building materials to spike, resulting in higher construction costs. As you can see, there are a number of ways that the unpredictable nature of a Trump presidency could affect Canadian homeowners and investors alike.
Canada an Attractive Option for Global Real Estate Investors
On the other side of the coin, real estate is go-to option for global investment and, in times of uncertainty, investors look to markets where the political and social landscape is more stable. Canada – and Vancouver in particular - is a popular location for investment because of its stability both economically and socially. Should a Trump presidency result in turmoil in the US, Canadian cities will only be more attractive to investors looking for a safer option for their investments.
Will Americans Look to Canada for Stability?
Indeed, many Americans are exploringthe option of Canada as a viable alternative to the US’s current political uncertainty. At a local level, Vancouver’s real estate market is often representative of the political climate in the province. In 2016, new policies implemented by the government were quickly reflected by a slowdown in the high end of the market. With the upcoming provincial election looming, many people are taking a “wait and see” approach to how local real estate sales may be affected by further government intervention in BC’s real estate markets.
Know What to Watch For
While we never really know for sure how strongly real estate markets will react to economic and political changes, being aware of the areas which can be affected – sales, mortgage rates, and construction costs, to name a few – will help you have an idea of what may signal a shift.
Have Questions About the Vancouver Real Estate Market?
Contact me to discuss any questions you may have about buying or selling real estate in the Vancouver area. I'm happy to share my expertise with you. Give me a call today at 604-910-7777.