What Does a Trump Presidency Really Mean for Canadian Real Estate?
Despite all odds, The Donald is in. Let the fear mongering begin. A recent article from Money Sense titled US Interest in Canadian Real Estate Surges wasn’t about to waste any opportunities. The author, Romana King (a licensed Realtor) writes panicked Americans have upped their online search activity for Canadian real estate.
For a further unbiased analysis, the article highlights a recent survey of local Realtors…
“The most desirable location in this province, according to 62.5% of real estate advisors, is the Greater Toronto Area, while just over two-thirds (67.2%) pointed to the GTA as the region in which Americans purchased the most property over the same period of time.
Looking ahead, 38.4% of survey respondents from Ontario expect U.S. inquiries into Canadian real estate to increase following today’s Trump inauguration.
According to 32.1% of Royal LePage realtors, Victoria is the preferred location, while 25% of Royal LePage realtors cited Greater Vancouver as the top region of interest among American home-buyers considering a real estate purchase in B.C.
Looking ahead to 2017, 43.6% of B.C. respondents anticipate American inquiries into Canadian real estate will increase after Donald Trump takes office.”
If Americans were trembling from Donald Trump imagine the sticker shock when they see the prices of Vancouver and Toronto real estate.
The average detached house in Toronto recently hit $1.24 Million dollars. Meanwhile, a detached house in Greater Vancouver recently fell to a shade under 1.5 million. But as a desperate American you’ll also be whacked with a 15% foreign buyers tax.
To put that into context, the median house price in the United States is meager $234,000.
If American are some how able to overcome the hurdles, they’ll surely need a job. We got lots of those, if you like part time and minimum wage.
Or of course you could always stay in the states, where Trump promises cut corporate taxes and bring all the jobs home.
The only thing a Trump presidency is bringing to Canada is rising bond yields (which heavily influence fixed term mortgages) and a new NAFTA agreement. Something that has Bank of Canada Governor Stephen Poloz shaking in his boots, recently admitting a further interest rate cut could be coming in the future.
So unless the Canadian dollar falls to 50 cents or real estate prices get chopped in half, don’t expect those searches to translate into a surge of sales.