How The U.S. Election Will Impact Canada’s Housing Market

Donald Trump’s win in the U.S. presidential elections came as a surprise to many; the question is now how a Trump Presidency will impact Canada—particularly in the Canadian housing market. During his campaign, Trump promised to carry out mass deportations of illegal immigrants. Also, many Americans have expressed the desire to move to Canada if Trump were to win the election. How would these two events impact the Canadian housing market?

Stagnant Interest Rates

If Trump were to carry out his promise of deporting 11 million migrant workers who are (presumably) working illegally in the country, this would definitely hurt businesses. It’s no secret that the U.S. economy benefits substantially from migrant labour, and mass deportations would cause businesses to restrict hiring when the cost of labour goes up. The U.S. Federal Reserve will then try to keep interest rates low, and the Bank of Canada will likely follow suit. And low interest rates won’t help to cool the rising cost of houses in Canada. But this could be good news for those with the cash to buy houses.

American Demand For Housing

If there is a large exodus of U.S. nationals under a Trump Presidency, that will certainly boost the demand for housing in Canada, and the fact that the U.S. Dollar is 30 per cent stronger than the Loonie will certainly help to propel that demand. Canada’s larger cities will likely see the most demand.

Vacation Houses

If the U.S. economy were to go back into a recession under a Trump administration, this could hurt the U.S. currency. As a result, there will be a reduction in American demand for vacation houses in Canada.

Unfavourable Trading Conditions

If Trump forces a renegotiation of NAFTA trade agreements or withdraws from the agreement altogether, then trade barriers will certainly go up. This will hurt Canadian importers—including those in the housing industry. While the U.S. Economy can afford to be isolated (at least for a time) the Canadian population, with less than 40 million people, does not have such a luxury.

The truth is it is difficult to predict the impact of a Trump administration on the U.S. and Canadian housing market. His presidency may prove to be as unpredictable as his campaign, and the best you can do as a potential home buyer or seller is to act with caution and information. For more details on selling or buying a home, talk with one of our specialists today.