It’s been over a week that the U.S has voted their 45th president as Donald J. Trump. With the results of the vote there has been a wide range of emotion and it’s clearer than ever that there is a strong divide throughout the country along with global uncertainty. While Trump has been outspoken about immigration and building a wall to keep out it’s southern neighbors, what will his win mean for Canada; it’s friendly, socialist, northern neighbors. And more importantly, what will it mean for our real estate market?
Analysts have predicted that the U.S. Federal Reserve would gradually increase interest rates to reflect the country’s slow growing economy. Trump’s win however, may have altered this strategy. The problem is that his promise to deport 11 million workers (who presumably have entered the country illegally) will have a major impact on the already tight labor market. By taking that many workers out of the labor force, Trump could halt business which will be dangerous with the U.S. unemployment rate at an all time low of 4.9%. To combat the decline of businesses, the U.S. Federal Reserve will likely abandon their decision to increase rates. This will encourage consumers and businesses to borrow money and the Bank of Canada will likely follow suit. We can probably expect prolonged low interest rates in both Canada and the U.S.
There is also expected to be a boom for home sales in Canada. Many Americans have indicated that if there is a Trump victory they will be heading north to escape the Republican led government. Numerous websites have been developed to help those wishing to defect. A surge in demand for homes may become a reality and experts suggest that bigger urban centres will see the impact as the U.S. dollar has about 30% more buying power than the Canadian. Home sellers in Vancouver and other areas in B.C. shouldn’t expect a large increase largely due to the Foreign Buyer’s tax that was announced this past August.
Watch for part 2 next week.
Saskatoon real estate agent
Century 21 Fusion