Market Update - March 20 2025

As the trade war threats escalate home sales and new listings are beginning to decline according to the Canadian Real Estate Association (CREA). The threat of more and increased tariffs is causing tremendous uncertainty among buyers and sellers. The uncertainty causes buyers and sellers to hold off entering the market. Rates are currently low with the Bank of Canada rate at 2.75%.

The fear is that if prolonged and increased tariffs remain, the effect would be rising prices of goods and services. The effect of rising inflation is higher interest rates to combat the inflation. Many homeowners obtained variable mortgages. This means if rates rise, variable mortgage rates rise. Therefore, those homeowners with variable rates must contend with higher monthly payments and carrying costs such as insurance, electricity and maintenance.

Markets require stability otherwise the economy slows down. As stated in past articles, there are ways to combat rising inflation and interest rates such as purchasing a property in a corporation or trust. There are also opportunities for investors if the carrying costs can be managed, to purchase property at discount prices from those that must sell and then hold the income property or home in a trust or corporation to alleviate the carrying costs. Eventually when the market turns around and optimism rises, either keeping the property in a portfolio and/or selling the home at a premium.

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REAL ESTATE TALK & STATE OF THE MARKET