So as of yesterday, the U.S. has confirmed and is  getting ready to roll out a 25% tariff on imports from Canada and Mexico, starting Saturday, February 1st, 2025. However President Trump is still deciding whether to include oil in these tariffs, saying the decision will depend on factors like oil prices and how both countries handle issues like illegal immigration and drug trafficking.

Canada is the largest supplier of crude oil to the United States. As of recent data:

• Daily Exports: Canada exports about 3.5 to 4.0 million barrels per day (bpd) of crude oil to the U.S.
• Percentage of U.S. Imports: Canadian oil accounts for approximately 50-60% of total U.S. crude oil imports.
• Overall U.S. Consumption: Canada supplies roughly 20-25% of the total crude oil consumed in the U.S.

Experts warn that if Canadian oil faces tariffs, U.S. consumers could see higher gas prices so inflation is another big concern—higher fuel costs could make things worse, so the U.S. might hold back to keep prices stable.

We can expect the BoC will likely take action to manage the economic impact. Here’s a few scenarios of what we can predict could happen:

1. Likely BoC Response: The BoC might cut interest rates to encourage spending and investment. Even if they don’t drop rates right away, they could take a wait-and-see approach, holding off on hikes or hinting at future cuts. A weaker economy could also drag down the Canadian dollar, which would help exports but make imports more expensive.
2. Alternative Responses (If Inflation Rises): If tariffs push costs up, especially for imported goods, inflation could start rising. In that case, the BoC might keep interest rates steady or raise them slightly to keep inflation in check. However, this would only happen if inflation increases more than expected, which might be less likely.
3. Overall Prediction: The most probable scenario is a rate cut or a pause in hikes, especially if the tariffs hurt oil exports and economic growth. The BoC would likely monitor inflation closely, but its priority would be preventing a deep slowdown.

How can the Real Estate Market be Effected?

Conclusion: 

The Bank of Canada’s 2025 interest rate announcements are coming up on these dates:

• Wednesday, January 29
• Wednesday, March 12
• Wednesday, April 16
• Wednesday, June 4
• Wednesday, July 30
• Wednesday, September 17
• Wednesday, October 29
• Wednesday, December 10

The first of eight interest rate announcement of 2025 happens in 2 days on January 29th, 2025, but what’s it going to bring?

Why We can Expect Another Cut:

As of January 27th, 2025, the Bank of Canada is anticipated to announce a 25 basis point reduction in its benchmark interest rate on January 29th, 2025. This expectation arises amid potential U.S. tariff threats from President Trump, who has proposed a 25% tariff on Canadian imports starting February 1st, 2025. If implemented, this would lower the benchmark rate to 3.0%, marking the sixth consecutive rate cut since June.

The Canadian dollar has been a bit volatile with all this news. On January 21st, the dollar bounced back after an earlier dip against the U.S. dollar as investors weighed the chances of these tariffs actually happening. Prime Minister Trudeau reiterated that his government is ready to respond to all scenarios if President Trump imposes tariffs on Canada, adding that President Trump’s promised prosperity for the U.S. will require Canadian resources to fuel it.

Meanwhile, inflation in Canada dropped to 1.8% in December 2024, partly due to a sales tax break that kicked in mid-month. “Overall, there are a lot of moving pieces and temporary factors playing out in the inflation data at the moment,” said Andrew Grantham, senior economist with CIBC Capital Markets said. This lower inflation adds to the expectation that the Bank of Canada will lower rates, whereas the Canadian bond yields moved lower across a flatter curve. The 10-year was down 3.6 basis points at 3.242%, its fifth straight day of declines.

How will this Effect the Real Estate Market?

1.  Increased Demand: Lower interest rates make borrowing cheaper, reducing mortgage costs for buyers. This will lead to a surge in demand for homes, for both buyers looking for a home and investors looking to capitalize on lower financing costs.
2. Price Growth: As we all know that when demand increases and with relatively low inventory, the prices on homes will continue to increase as competition on homes increase as more buyers enter the market.
3. Boost to Investment Properties: With reduced carrying costs, more investors may consider entering the market, purchasing rental properties or second homes.

What is a Property Assessment:

What is the Current Market Value:

What is a Tariff?

A tariff is basically a tax that governments put on goods being imported or exported. The main reasons for tariffs are to protect local businesses by making imported stuff pricier, bring in extra cash for the government, and manage trade with other countries. There are different kinds of tariffs, like ones based on a percentage of the product’s price, flat fees per item, or a mix of both.

Tariffs can help local industries and create jobs, encourage making things locally, and add to government revenue. But they’re not all good news—they can make things more expensive for shoppers, limit choices, and even lead to trade wars if other countries fight back. While tariffs can be a useful tool, they often spark debates because their effects are a mix of economic and political challenges.

2018 Tariff:

Economic Impact:

“A trade war would be disastrous for both Canadian small businesses and consumers. We need to ensure that as governments face the tariff threat with their American counterparts, they must also stay focused on keeping Canadian businesses competitive at home,” said Corinne Pohlmann, Executive Vice-President of Advocacy. “The solution is a no-brainer. This is an SOS call to all governments: reduce red tape, eliminate internal trade barriers, and ease the tax burden on small businesses.”

• Gross Domestic Product (GDP): Preliminary assessments indicate a potential cumulative loss of $69 billion in economic activity for British Columbia alone between 2025 and 2028. Nationally, a 25% tariff could lead to a GDP contraction exceeding 2.4%, surpassing the impact of previous recessions.
• Employment: The tariffs could result in significant job losses, with estimates of up to 1.5 million positions affected across various sectors, including natural resources, manufacturing, transportation, and retail. British Columbia anticipates 124,000 job losses by 2028, with unemployment rates potentially rising to 6.7% in 2025 and 7.1% in 2026.
• Inflation: The Bank of Canada is expected to cut interest rates by 25 basis points to 3.00% on January 29, 2025, as a cautionary measure against the potential inflationary effects of the tariffs.

Sectoral Vulnerabilities:

• Automotive Industry: With 20% of inputs sourced across borders, the automotive sector faces significant cost increases and disruptions due to the tariffs.
• Energy Sector: Canada supplies the U.S. with 20% of its consumed oil, and the tariffs could drastically impact this sector, affecting both economies.
• Manufacturing and Natural Resources: Industries such as chemical and plastic manufacturing, forestry products, and machinery are highly vulnerable to the proposed tariffs.
• Government Response:Prime Minister Justin Trudeau has announced that Canada is prepared to retaliate if the U.S. enacts tariffs on Canadian goods, emphasizing that such measures would harm both economies by increasing costs and jeopardizing collective security. Ottawa has prepared a set of retaliatory measures to match the economic impact of any U.S. tariffs.

How will it Affect the Real Estate Market?

If Trump’s tariffs hit and hurt Canada’s economy, the BOC will probably lower interest rates even more to try and keep housing affordable. However, while lower rates might help with home buying, it wouldn’t be all good news, as job losses and less consumer spending could potentially drag down the market. The tariffs would likely cause inflation in the U.S., pushing the U.S. Federal Reserve to raise interest rates while the BOC lowers theirs. This could create more instability and hurt the Canadian dollar. As Moffatt puts it, you’d have inflation in the U.S. and economic weakness in Canada, leading to more market volatility.

• New builds: “25 percent tariffs are going to have a significant impact on the cost of building a house,” said Scott Fash, CEO of the Bild Alberta Association. He also stated, “I have no idea what it’s going to be in six months. So, they’re trying to forecast it just like any other business, and right now, there are a lot of unknowns.” If Trump follows through, the cost of materials for new builds and personal budgets could grow, which could make for a potent combination of higher price tags on homes and less money for buyers.

However, with lower interest rates and the need for housing for thousands of Canadians, we could see home prices rise because of lower interest rates, a shortage of housing, and due to the population growth. But the possibility of tariffs and economic uncertainty might create some ups and downs, which could make buyers and investors more cautious in the short term. Even though demand may stay strong, especially for properties in popular areas, the market could be caught between the boost from lower rates and the slowdown caused by tariffs. For buyers, affordability might still be tough, while sellers could benefit from less competition and higher prices.

Conclusion:

Canada has never experienced the threat of a blanket tariff on all imported goods before, and if a blanket tariff were placed on all Canadian imports, it could cause big problems for Canada’s economy. The tariffs could put downward pressure on Canada’s Real Estate market through job losses, economic uncertainty, and higher construction costs. However, potential interest rate cuts or increased foreign investment might provide some offsetting benefits, depending on how the situation evolves.

All we can do is brace for impact and see what Trump decides to do when he takes off on Monday, Jan 20th, 2025.

Is the frenzy of the Calgary real estate market a thing of the past? Sorry to say, not quite yet. With spring 2025 just around the corner, the market in the Alberta is looking like it’s gearing up to be another repeat of the last few years.

In this blog, we’ll break down some of the reasons why, so you can get a better idea of what’s coming your way if you’ve been waiting for the “right time”.

1. January Rate Announcement – Another Decrease:

2. 30-Year Amortization:

3. Insured Mortgages:

4. Population 41M+ in 2024:

Canada’s population jumped by over 1M people in 2024, pushing the total to more than 41M. This growth came from a mix of high immigration and natural population increases, with a big chunk coming from non-permanent residents. Between April and July 2024 alone, the population grew by about 250,000 people. When the population grows by over a million people in a year, it definitely puts more strain on the housing market. More people means more people looking for homes, which drives up prices and makes things harder to find. Builders and developers can struggle to keep up, which means longer waits for new homes and higher costs to build.

5. Spring – The Unhinged Real Estate Market:

Spring is ALWAYS the busiest season for real estate, but this year, it’s shaping up to be the wildest one yet. With rate cuts, new policies, population growth, and limited inventory – the competition is going to be much more fierce than what we have seen in the past. If you’ve been holding out, waiting for rates to come down and looking for the best deals, guess what… so has everyone else. If you’re still on the sidelines, get prepared now because you’re in for a wild one.

Conclusion:

1. Boost to the Energy Sector and Local Economy

• Export Competitiveness: Alberta’s economy is closely tied to oil and gas exports. A weaker Canadian dollar makes these exports more competitive internationally, potentially driving economic growth in the province.
• Increased Housing Demand: If the energy sector experiences growth, more jobs may be created, attracting workers and boosting demand for housing in cities like Calgary and Edmonton

2. Attraction for Foreign Investors

• Affordable Real Estate for Foreign Buyers: A weaker dollar makes Alberta’s already relatively affordable housing market even more attractive to foreign investors, particularly from the U.S., Europe, and Asia.
• Luxury and Vacation Properties: High-end homes in Calgary, Edmonton, and resort areas like Canmore or Banff may see increased interest from international buyers.

3. Rising Costs for Developers

• Higher Construction Costs: With many building materials and equipment are imported. A weaker dollar increases costs for developers, potentially leading to higher prices for new homes.
• Possible Supply Constraints: Rising costs may delay new projects or reduce the number of homes being built, contributing to supply shortages.

4. Affordability Challenges for Local Buyers

• Inflationary Pressure: A weaker dollar can drive up the cost of goods and services, potentially affecting household budgets and reducing affordability for local homebuyers.
• Potential Mortgage Rate Increases: If inflation rises, the Bank of Canada may increase interest rates, leading to higher mortgage costs and making it harder for some buyers to enter the market.

5. Strengthened Rental Market

• Increased Demand for Rentals: If affordability becomes an issue for buyers, more people may turn to renting, driving up demand in Alberta’s rental market.
• Attractive Returns for Investors: Investors may find opportunities in rental properties.

The Possible Impact on Interest Rates:

The drop in the CAD could impact future interest rates, mainly through rising inflation as import costs go up. To tackle this, the BOC might look to raising rates, which would make mortgages, loans, and other borrowing more expensive. If other central banks, like the U.S. Federal Reserve, hike their rates in response to global trends, Canada might do the same to keep the currency stable and prevent capital from flowing out.

On the other hand, if the weaker dollar helps boost the energy sector and drives economic growth, the BOC might hold off on raising rates to support recovery. Job creation and business investments could ease inflation pressures, encouraging a more cautious approach. The bank’s decision will depend on finding the right balance between managing inflation and supporting economic growth.

Conclusion:

As of December 15th, 2024, several significant incentives are available to assist homebuyers in Canada, particularly first-time buyers.

In this blog we will go over the all the key programs that have been rolled out:

The 2 Big Changes:

1. Increased Insured Mortgage Cap: The insured mortgage limit goes up from $1M to $1.5M. This means buyers can get a mortgage with less than 20% down for homes up to $1.5M, as long as they meet federal requirements. Before this, anyone buying a home over $1M needed at least a 20% down payment, which made it harder to afford pricier homes. By raising the cap, the government is making higher-priced homes more accessible for middle-income buyers. This change is expected to boost activity in the mid-to-upper price ranges of the market.

2. Extended Mortgage Amortization Period: The government is giving first-time homebuyers and buyers of new homes the option to stretch their mortgage payments over 30 years. This will lower their monthly payments, making homeownership more affordable. While it means paying more interest in the long run, the immediate advantage is more manageable payments each month, helping buyers handle higher housing costs and stay on top of their finances.

1. Tax-Free First Home Savings Account (FHSA): The FHSA allows Canadians to contribute up to $8,000 per year, with a lifetime limit of $40,000, towards their first down payment. Contributions are tax-free, and withdrawals used for purchasing a first home are also tax-free.

2. Enhanced Home Buyers’ Plan (HBP): The HBP enables first-time homebuyers to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) to fund a down payment, an increase from the previous limit of $35,000. This can be combined with FHSA savings for a larger down payment.

3. First-Time Home Buyer Incentive (FTHBI): The FTHBI offers eligible first-time homebuyers a shared equity mortgage with the Canada Mortgage and Housing Corporation (CMHC). This program provides 5% of the home’s purchase price for resale homes and 10% for newly constructed homes, assisting with down payments.

By lowering upfront costs and monthly payments, these programs are intended to make homeownership more accessible. This will lead to a much more active real estate market for 2025, with climbing prices as a result of increased affordability and easier access for buyers. It will also be easier to purchase a home with the insured mortgage cap raised to $1.5M and 30-year mortgages being available to first-time buyers. It’s anticipated that demand for both new and resale homes is expected to increase as a result of initiatives like the FHSA, the updated HBP, and incentives for new construction. Altogether, these changes should boost buying activity, encourage new construction, and push prices higher, particularly for entry-level and mid-range homes. If you’re looking to get into the market, the prices we see today will be the lowest you’ll see them; don’t let the opportunity for home ownership pass you by in this “slower” season.

On December 11, the BOC will make its final rate announcement for 2024, and most economists are expecting another cut. The question we are all wondering is: by how much?

Why We can Expect Another Cut:

With much anticipation and only a few days away, there are many economists in recent news stating that with the poor unemployment rate, state of inflation, and economy, alongside recent trending cuts, we are anticipating another 25 basis point drop, bringing it down from its current rate of 3.75% to 3.50%.

Supporting the prediction of a 25 basis point cut is the latest Statistics Canada inflation report, which showed inflation reaccelerated to 2.0% in October, up from 1.6% in September. This reading was slightly higher than most market participants expected, implying that the BoC’s goal of stabilizing inflation will not be a smooth one.

Conclusion:

Why bother winterizing your home? As one of the biggest purchases throughout your life, you want to protect your investment, and by getting your home ready for the cold, these steps can save you money on energy, prevent costly damage, and keep your home warm and safe all winter long.

In this blog, we’ll go over some quick tips on how to get started!

1. Seal Drafts and Insulate

• Doors and Windows:
  • Install weather stripping around doors.
  • Use caulk to seal gaps and cracks around windows.
  • Consider installing storm doors and windows for added insulation.
• Insulate Gaps:
  • Add insulation to walls, attics, and basements.
  • Use foam sealant for gaps around pipes and wiring.

2. Protect Pipes

• Insulate Pipes:
  • Wrap exposed pipes with foam insulation to prevent freezing.
• Outdoor Faucets:
  • Drain garden hoses and shut off water to outdoor spigots.
  • Cover faucets with insulated covers.

3. Maintain Your Heating System

• Furnace Tune-Up:
  • Have your furnace or boiler inspected by a professional.
  • Replace air filters to improve efficiency.
• Thermostat Upgrade:
  • Consider an upgrade for better temperature control.

4. Check Roof and Gutters

• Inspect Roof:
  • Look for damaged or missing shingles and repair them.
• Clean Gutters:
  • Clear leaves and debris to prevent ice dams.
  • Ensure downspouts direct water away from the foundation.

5. Improve Ventilation

• Prevent Condensation:
  • Use exhaust fans in kitchens and bathrooms.
  • Ensure attic vents are clear to prevent moisture buildup and ice dams.

6. Add Insulation and Draft Stoppers

• Use draft stoppers for doors.
• Add thermal curtains to windows.
• Lay rugs on floors to reduce heat loss.

7. Check Carbon Monoxide and Smoke Detectors

• Replace batteries and test all detectors.
• Install detectors near sleeping areas and furnaces.

Conclusion:

Getting your home ready for winter is super important to shield it from the challenges of cold weather. It also helps you save energy, cutting down on heating bills and avoiding potential expensive issues like frozen pipes or roof leaks. The best part is it keeps your home cozy and safe all season long. Prepping ahead of time not only protects your home in the long run, as we know, the winters can be quite long.