I never thought we’d have a Trump presidency, none of us did. What does Trump’s election mean to Canadian real estate?
Now that the shock has worn off and the financial markets have calmed down, we will all accept this November surprise and then in time we will find out what it will mean to us in Canada.
So what does the Trump presidency mean to Canadian real estate?
1) Trump and Uncertainty
With Hillary Clinton, we pretty much knew what she was going to to. It was going to be business as usual and for Canada and the rest of the world that meant stability. We don’t know what Trump will do about anything. He likely doesn’t know himself and that means uncertainty. Uncertainty means caution. Caution means low interest rates and low interest rates mean business as usual here in Canada for our real estate markets. Uncertainty in the world also for Canada is good as we are a safe harbour for money and people and liberal ideas.
2) Trump and Free trade
The new president said that he would dismantle NAFTA. He wants to bring jobs back to America. Free trade gets a bad rap because people don’t understand how powerful free markets are. Like it or not, the USA is our largest trading partner. If Donal J. Trump starts taking away the gains that free trade brought, there is going to be a lot less money floating around in the economy. The effect on our real estate market will likely be good in terms of cooling down the buyer demand. But it will be bad as already something like 40% of all economic activity is related in some way to the housing market. If the general economy shutters, a higher percentage is going to be tied to housing.
3) Trump and Immigration (and the safety of the world)
Canada is seeing historic immigration numbers. Trump said that he is going to stop Muslims from entering the states. He said that he is going to build a wall to keep the Mexican out. This is actually positive news for Canada. Immigrants who come to Canada tend to be highly educated and add a lot to our society in terms of economic impact. Also, it is well reported that lots of Americans say they will move to Canada if Trump gets elected. What if 1% of them actually did? Canada would be getting some of the smartest Americans coming here. Big bonus for us. We get the liberal, well educated Americans, not the ones who voted for Trump.