In this episode of Trump Trade War, The Hub’s publisher Rudyard Griffiths speaks with Theo Argitis, managing director at Compass Rose Group, to discuss how the tariffs will affect housing in Canada.
To read Theo’s full analysis, click here.
Key points:
- Softening housing market: The Canadian housing market is experiencing a significant slowdown, with home sales dropping by 3.3 percent in January and new listings surging by 11 percent, the highest increase in 30 years. However, prices have yet to adjust significantly.
- Interest rate challenges: Despite the Bank of Canada’s aggressive rate cuts, long-term mortgage rates remain high due to inflation concerns in the U.S., which are spilling over into Canada. This is creating a challenging environment for homeowners facing mortgage renewals at higher rates.
- Trade war uncertainty: The potential imposition of large tariffs by the U.S. could further weaken the housing market, as job security concerns may deter buyers. However, tariffs could also keep inflation and interest rates elevated, limiting the Bank of Canada’s ability to provide further rate cuts.
As the tariff threat looms over with an early March deadline to the pause, economists are examining how President Trump’s proposed tariffs could impact the Canadian housing market. Theo Argitis, managing director at Compass Rose, joined Rudyard Griffiths on The Hub to discuss the potential for cheaper housing in Canada amid a softening real estate market and economic uncertainty.
Argitis noted that the Canadian housing market is in a “holding pattern,” with buyers hesitant due to high prices and economic uncertainty. “We’re seeing a very, very much a softening housing market,” he said, pointing to the sharp decline in home sales and the surge in listings. While these conditions could eventually lead to lower prices, Argitis emphasized that the market has not yet seen significant price adjustments.
The affordability crisis remains a major issue, particularly for first-time homebuyers and younger Canadians. “Prices are very, very high,” Argitis said, adding that many Canadians are struggling to enter the market. At the same time, uncertainty around the U.S. trade war and its potential impact on the Canadian economy is further dampening demand.
The affordability crisis remains a major issue, particularly for first-time homebuyers and younger Canadians. “Prices are very, very high,” Argitis said, adding that many Canadians are struggling to enter the market. At the same time, uncertainty around the U.S. trade war and its potential impact on the Canadian economy is further dampening demand.
If President Trump follows through on his threat to impose large tariffs on Canada and Mexico, Argitis warned that the housing market could face further weakness. “People are going to be worried about their job and less likely to go out and buy a home and take massive mortgages,” he said. However, he also noted that tariffs could have an inflationary effect, potentially keeping interest rates higher and limiting the Bank of Canada’s ability to cut rates further.
Generative AI assisted in the production of this story. If you are quoting from or referencing this episode, please refer to the audio to verify.
