Homebuyers, sellers feeling 'extra pressure' amid U.S. tariff uncertainty

For Valon Mcinnis, the idea of buying a home was always an exciting one.

But this time around — with the uncertain see-sawing of Donald Trump's tariff policy — her experience has been the opposite. 

"I thought it was going to be a lot more fun, but it's more stressful than anything," she said at an open house in Ottawa on Sunday. 

Last week, the U.S. president launched his long-threatened trade war by introducing 25 per cent levies on most Canadian goods.

But just days later, he offered a partial reprieve by pausing tariffs on Canadian exports that complied with the Canada-U.S.-Mexico Agreement (CUSMA) until April 2.

Amidst all the unpredictability, Mcinnis — who recently sold her house — says buying a new one has her worried about inflated costs that could go along with it. 

Groceries, car repairs and renovations will all become more expensive, she said, making a new house harder to afford. 

"There's definitely some concern, some uneasiness… I feel just a little bit [of] extra pressure and I don't think that's how you want to feel when you're making such a big purchase."

Meanwhile, Besime Amjadi is struggling to sell her home and blames the fear that Trump's threats have generated.

"I feel like [the real estate market] is questionable right now because people are afraid," said Amjadi, who's been trying to sell for a month.

Amjadi thinks people expect the cost of homes to go down, and that has her worried about how much interest her listing will get.

Concerns not unusual

These sorts of worries are being heard across the city these days, said Andrew Thake, a mortgage broker in Ottawa.

"There's definitely more questions coming up saying, 'Is this a good time to buy? Should we be concerned?'" Thake said. 

But according to Thake, the tariffs may not be entirely bad for the real estate market.

The "talk of the town," Thake said, is that in response, interest rates may come down. The Bank of Canada's policy rate is currently sitting at about three per cent, and is expected to be updated on March 12. 

Lower interest rates ultimately mean lower mortgage payments, which Thake says is good news for homeowners. 

When rates dropped significantly during the pandemic, the market "exploded," Thake said, adding that he believes another dip could restore consumer confidence.

Paul Czan, president of the Ottawa Real Estate Board said that would also open doors for first-time homebuyers. 

"With any decrease in interest rates, we see an increase in buyer purchasing power," Czan said. 

"Those first-time buyers who have been waiting to get into the marketplace are finally going to be able to be in a position to be able to afford the home that they've been trying to own for the last few years."

'Uncertainty' is the only sure thing

Ottawa's real estate market is typically steady, according to Czan, because of the presence of the public sector in the city.

But in the latest data from the Ottawa Real Estate Board, home sales in January were 13 per cent below the city's five year average. 

Czan said it's hard to predict what the market will look like in coming months. 

"The only thing that's certain with these tariffs is uncertainty. With the administration down south, it seems like they come up with a new idea on a daily [basis], and it's almost tough for us to keep track," he said. 

Yet he thinks the outcome will be a decline in home building rather than an increase in housing prices. 

With the cost of materials rising, builders face bigger risks trying to acquire the inventory needed for construction, Czan said.

"There's just not been enough housing available for our buyers in the marketplace. And with these tariffs coming into place, it may further exacerbate that issue."