The Other Side of the Real Estate Market: Why Prices Could Drop

Most people are focused on the increase in real estate prices, but today, I want to flip the script. Let’s talk about why the market might actually drop. Here are two key reasons that aren’t being discussed enough:

1. U.S. Tariffs If the U.S. imposes tariffs on Canada, it could shake up our economy in a big way. Tariffs can lead to higher costs for businesses, less competitiveness, and ultimately, a slowdown in growth. A weaker economy often means higher unemployment, which directly impacts the housing market. When people lose jobs or feel uncertain about their financial future, fewer are willing or able to invest in homes. This ripple effect could push housing prices downward.

2. Declining Immigration Immigration is a massive driver of demand in the housing market. Right now, immigrants and international students contribute about $30 billion to the Canadian economy. But what happens if immigration starts slowing down? With fewer newcomers settling in Canada, demand for housing drops. Less demand means less competition, and that could lead to lower prices. This isn’t just about housing—a drop in immigration can also hurt the broader economy, creating a cycle that further impacts the market.

These are two significant factors that could influence the real estate market in the coming years. While everyone’s focused on rising prices, it’s worth considering the other side of the story.

Want to dive deeper into this topic or chat about other factors influencing the economy? Feel free to reach out. I’m always happy to discuss and keep you informed.