Warren Buffett has famously referred to tariffs as an “act of war” and warned that, unless the tooth fairy intervenes, they are inevitably inflationary. Given this perspective, it’s reasonable to view former President Donald Trump’s declared tariffs as a sign of economic hostility.
When we turn our focus to the #1 asset most people own—housing—it’s clear that various supply constraints since March 9, 2020, (the start of the COVID pandemic) have led to an unprecedented doubling in the cost of building materials. Not surprisingly, most of the costs associated with these unforeseen “biological tariffs” were passed down the supply chain, ultimately landing in the pockets of homebuyers.
These challenges were compounded by the G7 central banks slashing borrowing costs to historic lows, including Europe’s move into negative interest rates. Meanwhile, home prices across Southwestern Ontario soared, with some areas seeing home values increase at a rate of 1% per week in the later months of 2022.
To put things into perspective, the average home price in Canada jumped more than 24% between 2020 and 2022. The question now is: what will the consequences be of the latest “Mardi Gras Tariffs”—a 25% levy on Canada and Mexico?
Appraisers at Accurate (Peel) and the seasoned agents at Heritage Caledon Realty believe that these tariffs will raise both the cost of construction materials and, eventually, labor. With supply chains already strained, these increases may further drive up housing prices, leaving many to wonder how much further the market can go.
If you feel overwhelmed by the constant barrage of news and would appreciate a confidential conversation about how these developments might impact your financial future, the team at Accurate (Peel) Appraisers and Heritage Caledon Realty is here to help. We’re dedicated to providing clarity and answers during these uncertain times.