A few days ago, I shared my thoughts on how tariffs will impact Canadian real estate, and I was thanked for my insights. But to really dig into this issue, we need to break it down by market segment—because the impact won’t be the same for everyone.
?? Luxury Homes & High-End Buyers
- The ultra-wealthy aren’t as affected by rising material costs or interest rates.
- Many high-end properties are cash purchases—tariffs on materials like steel, lumber, and appliances may increase costs, but these buyers can absorb them.
- If tariffs disrupt international investment, we might see fewer foreign buyers, slightly softening this segment, but prime real estate will always have demand.
- And if things keep going the way they are, the rich will own all the lakeshore properties, parkside properties, and mountaintop views. Public access to these prime locations will shrink, leaving everyday Canadians with fewer and fewer opportunities to enjoy the country they call home.
?? Middle-Class & Move-Up Buyers
- Higher material costs + higher borrowing costs = fewer people upgrading.
- People who would have moved up to a bigger home may stay put instead, which reduces inventory for first-time buyers.
- Developers will pass higher costs onto buyers, making new homes even less affordable for middle-income earners.
?? First-Time Buyers & Lower-Income Families
- This is where the biggest pain will be felt.
- Tariffs on materials will increase construction costs, making affordable housing projects more expensive or delayed altogether.
- Interest rates already price many out of the market—if inflation pushes them further, we could see first-time buyers locked out entirely.
- The rental market will tighten as fewer people transition into homeownership, driving rents even higher.
?? The Growing Wealth Gap & The Need for a New Form of Ownership
- As the cost of entry rises, those who already own property will benefit from appreciation, while those who don’t will find it even harder to break in.
- The gap between the rich and the poor will expand, not just in homeownership but in intergenerational wealth—homeowners will pass down assets, while non-owners stay trapped in rising rents.
- This isn’t the first time Canada has faced a housing crisis. In 1967, we introduced condominium ownership as a new model to meet growing demand.
- Maybe it’s time to rethink homeownership again. If the next generation is going to start with nothing and still have a chance to own property and build wealth, we need new solutions.
The Canadian real estate market is already strained. Tariffs could add another layer of pressure, forcing first-time buyers and lower-income families further to the margins, while the wealthier segments absorb the impact with little disruption.
The big question: Are we prepared for an even wider economic divide in housing? And is it time to introduce a new form of ownership to make homeownership possible again?
What do you think? What alternative housing solutions could work in today’s market?
#RealEstateCanada #Tariffs #HousingCrisis #WealthGap #FirstTimeHomebuyers #EconomicImpact #HomeOwnershipSolutions
