Canada is undergoing rapid political and economic changes. With Mark Carney now serving as Prime Minister, replacing Justin Trudeau, and a snap federal election scheduled for April 28, the national landscape is shifting in ways that directly affect housing and mortgage markets.

These events, combined with ongoing U.S. tariffs on Canadian steel, aluminum, and oil, have introduced short-term uncertainty for buyers, homeowners, and investors. Here’s how to make smart housing and mortgage decisions amid this volatility.

1. Mortgage Planning: Flexibility Is Key

📉 The Bank of Canada is easing rates, but not aggressively—mainly due to inflationary pressure caused by tariffs and broader global uncertainty.
🔹 Carney’s background as a central banker suggests a measured approach to fiscal and monetary stability, not sudden overcorrections.
🔹 Lenders are pricing cautiously, and spreads between fixed and variable remain narrow.

📌 What You Can Do:

• Consider 1- to 3-year fixed terms if you’re buying or renewing—this offers immediate savings with flexibility for future rate drops.

• Variable-rate borrowers should prepare for gradual relief, not overnight changes. Budget accordingly.

2. Buying or Selling in a Pre-Election Market

🏠 Confidence is mixed. Some buyers are pausing, waiting to see if the election brings housing reform. Others are jumping in, trying to secure a deal before the market shifts again.

🔹 Tariffs are raising construction costs, especially for materials like steel.
🔹 The removal of the carbon tax (effective April 1) may reduce utility costs and improve monthly affordability slightly for homeowners.
🔹 Carney’s economic leadership may restore investor confidence, encouraging developers to move forward.

📌 What You Can Do:

• If you’re buying, act before post-election volatility changes affordability.

• If you’re selling, leverage the low-rate window and improving consumer sentiment.

3. Managing Housing Costs Amid Trade and Tax Changes

💸 Tariffs are still in effect:

• 25% on Canadian steel and aluminum

• 10% on oil (effective April 2)

🔹 This will keep construction costs high, slowing new housing supply.
🔹 Renters may face pressure as ownership becomes more expensive in the short term.

📌 What You Can Do:

• Delay major renovations if tied to steel, lumber, or fuel-intensive materials.

• Consider energy-efficient upgrades to offset long-term utility and heating costs.

• If you own rental property, monitor for tenant hardship as inflation affects living costs.

4. Expect More Policy Announcements Post-Election

📅 With a federal election scheduled for April 28, expect new housing proposals from all parties.
🔹 Mark Carney’s early moves signal a focus on affordability and stability, but long-term direction will depend on electoral results.

📌 What You Can Do:

• Stay informed on party platforms—especially on housing supply, rent control, and lending rules.

• If you’re planning to refinance or buy post-election, consider how a policy shift could affect qualifications or rates.

Conclusion

📉 The environment is volatile, but manageable with the right approach.
🏡 Flexibility, caution, and a clear understanding of the economic forces at play will help you make smart mortgage and housing decisions.
🗳️ With a new Prime Minister and an election underway, housing policy may shift significantly in the months ahead.

📌 Next week: We explore the long-term housing outlook once the new government is elected.

Canada is facing growing trade tensions with the United States. With recent U.S. tariffs on Canadian steel, aluminum, and oil, concerns are rising about how this will affect the Canadian economy, mortgage rates, and housing prices heading into 2025.

Here’s what homeowners, buyers, and investors need to know about how U.S. trade policies could shape the Canadian real estate market.

1. How U.S. Tariffs Are Impacting the Canadian Economy

The U.S. has recently announced:

• 25% tariffs on Canadian steel and aluminum
• 10% tariffs on Canadian oil and gas exports

🔹 Higher Costs for Materials: Construction projects, especially in housing, could face higher costs as materials become more expensive.
🔹 Reduced Export Revenue: Canadian industries could see lower profits, potentially leading to job losses and reduced economic activity.
🔹 Inflation Pressure: Higher costs for goods and energy could drive inflation up, putting pressure on interest rates.

📌 Why It Matters for Housing: Increased costs and inflation could make it more expensive to build and buy homes, while reducing household purchasing power.

2. Will Mortgage Rates Be Affected?

✅ Short-Term Impact:

• The Bank of Canada (BoC) is cutting rates to stimulate the economy, but inflation from tariffs could slow down or limit future rate cuts.
• Lenders may adjust rates cautiously, watching for how inflation trends develop.

✅ Long-Term Impact:

• If tariffs lead to prolonged inflation, the BoC could pause or slow rate cuts to avoid destabilizing the economy.
• On the flip side, if tariffs weaken the economy significantly, the BoC may be forced to cut rates more aggressively to support growth.

📌 What to Watch:

• Inflation data in the next 3-6 months.
• The BoC’s commentary on global risks and trade impacts.
• Lender adjustments to mortgage rates based on market risk.

3. How Will Tariffs Affect Home Prices?

🔹 Higher Building Costs: If construction materials remain expensive, new housing developments may slow, limiting supply and keeping prices elevated.
🔹 Reduced Buyer Confidence: Economic uncertainty may cause some buyers to delay purchases, softening demand in the short term.
🔹 Rental Market Pressure: If home prices remain high and ownership slows, demand for rental properties could increase, driving rental prices up.

📌 Forecast:

• Short-Term: Prices may hold steady or dip slightly if demand slows.
• Long-Term: If supply tightens and rates drop, prices could rebound strongly in 2025.

4. What Should Buyers and Homeowners Do?

🔹 For Homebuyers:

• Act sooner if you find a good deal, especially before construction costs drive prices higher.
• Be flexible with housing types and locations to stay within budget.

🔹 For Current Homeowners:

• If you’re considering refinancing, act while rates are still falling, but stay alert for any sudden changes.
• If you plan to sell, monitor market activity closely—demand could pick up if rate cuts accelerate.

🔹 For Investors:

• Rental properties could see increased demand if homeownership slows.
• Focus on regions with stable job markets to minimize vacancy risk.

Conclusion

📉 Tariffs are introducing new risks to Canada’s economic and housing outlook.
🏡 Mortgage rates may fluctuate, depending on how inflation and economic growth evolve.
📊 Home prices will be influenced by supply, construction costs, and consumer confidence.

📌 Next week: We’ll explore strategies for homebuyers and homeowners to navigate political and economic uncertainty.

Canada is entering a period of significant political change. With the Prime Minister stepping down once a new Liberal leader is chosen and Parliament prorogued until March, there is uncertainty surrounding housing policies and the overall economic outlook. Homebuyers, sellers, and investors need to understand how these shifts could affect real estate prices, mortgage rates, and housing availability in the coming months.

1. Leadership Change & Housing Policy Uncertainty

With a new leader set to take over, existing housing policies could shift. The current government has focused on affordability measures, foreign buyer restrictions, and incentives for homebuilders. However, a new Prime Minister may bring different priorities, impacting:

🔹 Housing Supply Initiatives: Will the next leader increase, reduce, or restructure government support for new home construction?
🔹 Affordability Programs: First-time homebuyer incentives and rent control policies could change.
🔹 Foreign Investment Regulations: Restrictions on non-resident buyers might be tightened or lifted, affecting demand.

📌 What to Watch: The direction the new leadership takes will determine the market’s trajectory, especially if major housing reforms are introduced.

2. Prorogation of Parliament & Delayed Housing Policies

With Parliament suspended until March 2025, all legislative business has been paused. This means:

🔹 New housing initiatives are on hold, delaying potential market relief.
🔹 Affordability measures that were in progress will need to be reintroduced, slowing any policy changes.
🔹 Investor confidence could decline, as uncertainty makes long-term planning riskier.

📌 What to Watch: The housing market may remain in limbo until Parliament resumes and new policies are tabled.

3. Economic Uncertainty & Market Reactions

Political shifts can impact interest rates, inflation, employment, and economic growth—all of which affect housing.

🔹 Mortgage Rates: Rate cuts are underway, but instability could cause fluctuations.
🔹 Investment Hesitancy: Developers and investors may pause major projects until policy direction is clearer.
🔹 Home Prices: Uncertainty can reduce demand, keeping prices steady, but prolonged hesitation could tighten supply and push prices back up later.

📌 What to Watch: The real estate market will be highly sensitive to government actions and economic signals in the coming months.

Conclusion

📉 Political uncertainty creates short-term instability, but long-term market direction depends on the new leadership’s policies.
🏡 Buyers and sellers should stay informed, as upcoming government decisions will shape affordability and demand.
📊 The housing market’s response will become clearer when Parliament resumes, and economic policy is clarified.

📌 Next week: We’ll explore how U.S. trade policies and tariffs are impacting Canadian mortgages and home prices.