The Canada-U.S. trade dispute appears to be casting a cloud over B.C.’s spring housing forecast, though one economist cautions against reading too much into tariffs.
“From a purely statistical standpoint, there’s not really much to the story around the uncertainty from tariffs and so on, but it’s hard to ignore,” says Andrew Lis, director of economics and data analytics with Greater Vancouver Realtors (GVR). “It’s front and centre in the media, and I think it’s captured the attention of a lot of people.”
Lis published a March 12 analysis for GVR examining a metric called the “Economic Policy Uncertainty Index for Canada” to see whether it has historically correlated with home sales in Greater Vancouver.
The index, published by the Federal Reserve Bank of St. Louis, measures economic uncertainty in Canada and other countries by tracking the volume of news articles discussing economic policy uncertainty. The index is currently at its highest level ever, spiking 432 per cent from October 2024 to February 2025.
However, “it has very, very little, almost no correlation whatsoever, to the sales in our market. There isn’t really much to back up that story. The story being that tariffs are the thing that’s weighing down everything,” said Lis.
Another economist told BIV that in addition to economic malaise, interest rates are another big variable.
Brendon Ogmundson, chief economist with the British Columbia Real Estate Association, said because tariffs are inflationary, the Bank of Canada may not have much ammunition left in its arsenal.
The central bank is “really worried about inflation and really worried about inflation expectations,” he said, adding the BoC expects tariffs will cause inflation to go beyond above its two-per-cent target as long as they’re in place.
“That really handcuffs what they can do and how much they can lower rates, so we may not get much more from the Bank of Canada,” Ogmundson said.
As a result, he said he does not expect five-year fixed rates to fall much lower than the four-per-cent mark.
Meanwhile, one local Realtor told BIV he expects a soft spring market, especially for condos, but that this could actually be beneficial for some cohorts of buyers.
Adil Dinani, principal of the Dinani Group, Royal LePage West Real Estate Services, said some prospective buyers are “high-grading” their opportunities, with more desirable neighbourhoods, school catchments and buildings now in closer reach.
“Growing up we got the trail mix, and you’d always go for like the coconut or the chocolate versus the almonds. That’s what buyers are doing,” he said, adding that there is still a healthy appetite for entry-level properties in all categories.
Similarly, renters may also benefit this spring from lower rents, higher vacancies and a war of incentives between landlords.
Andrew Charney, director of residential asset management with Peterson Group, said while rental demand varies month to month, 2024 was a “slow year” with rents dropping by three-to-five per cent and vacancy doubling in some cases to around the two-per-cent mark.
As winter turns to spring, Charney said he expects healthy rental activity.
“I see the spring market actually starting to move. I think people are starting to take advantage of a lot of rental incentives,” he said.
Incentives can potentially include one month’s free rent, discounts on rental deposits, free parking, and negotiated discounts with moving companies, tenant insurance providers and internet providers.
With mixed opinions about the buoyancy of the spring market, time will tell whether the economic uncertainty translates into lower sales and prices, and higher inventory and vacancy.
With no major hits to GDP or unemployment yet, GVR economist Lis said things are looking OK for now, despite all the tariff talk.
“Six months from now, we might look back and say it probably didn’t have much of an impact on the market directly, other than through perhaps some kind of psychological element,” he said.
