The ongoing trade tensions between Canada and the United States are having significant implications for British Columbia's real estate market, including Victoria. With potential tariffs on Canadian goods and retaliatory measures from Canada, homebuyers, investors, and developers are facing new challenges.
Key Impacts of the Canada-U.S. Trade War on BC Real Estate
1. Rising Construction and Renovation Costs
The U.S. and Canada trade billions of dollars in homebuilding materials, including glass, hardware, appliances, and wood products. If new tariffs are imposed, the cost of building and renovating homes in BC, including Victoria, will increase. Higher construction costs could lead to fewer housing starts and make affordability an even greater issue.2. Economic Uncertainty Reducing Consumer Confidence
A trade war could weaken the Canadian economy, affecting employment rates and consumer confidence. When economic conditions become uncertain, potential homebuyers may delay purchases, leading to a temporary slowdown in real estate activity. However, lower interest rates may offset some of these effects and encourage buying.3. Slower Market Growth but Stable Demand
Despite economic concerns, RBC projects a 16.5% increase in home resales across British Columbia in 2025. However, affordability challenges will keep price growth minimal at just 0.9%. This means that while more homes may be sold, prices won’t rise significantly.4. Short-Term vs. Long-Term Market Effects
Experts predict that Metro Vancouver and Victoria may experience a short-term slowdown in sales, particularly in the high-end market, as international investors wait for economic stability. However, lower borrowing costs and strong local demand—especially from retirees and government employees in Victoria—will likely support the market in the long run.What Does This Mean for Victoria’s Real Estate Market?
Victoria’s real estate market is unique due to its high demand from retirees, government workers, and local buyers. While construction costs may rise, Victoria’s limited housing supply and steady demand will likely keep prices from dropping significantly. Buyers and investors should monitor policy changes, interest rates, and tariff developments to make informed real estate decisions.Looking to Buy or Sell in Victoria?
If you're considering buying or selling a home in Victoria, staying ahead of market trends is crucial. Contact Mona Palfreyman for expert real estate insights and personalized assistance.*This information is not be considered advice but to be used for your information gathering purposes only.*This information in not advise and should be used for information gathering purposes only.