Hopeful homeowners seem resilient despite economic uncertainty – at least in Nova Scotia
They could have a potentially seismic negative impact on the Canadian economy if they come into effect at the beginning of March – but Donald Trump’s threatened tariffs don’t appear to be pushing many hopeful homebuyers on to the sidelines yet, at least if the Nova Scotia market is anything to go by.
Trump seemed set to push ahead with 25% tariffs on most Canadian goods crossing the border and a 10% charge on Canadian energy last month, before ultimately announcing a 30-day delay on February 3.
The threats triggered concerns of an escalating trade war and possible deep recession in Canada – but they haven’t deterred Nova Scotia buyers who were determined, at the beginning of the year, to get on the property ladder or move to a new property, according to Dartmouth-based broker David Clarke (pictured top).
The TMG The Mortgage Group broker told Canadian Mortgage Professional that those buyers who wish to live in the home they’re purchasing are still moving ahead with their plans, even though some investor buyers are getting cold feet because of the economic storm clouds.
“With buyers specifically, there’s a little bit of an impact from what’s happening and the uncertainty, but if someone wants to buy a house [to live in] they’re going to do it whether or not something happens. That’s what I’ve been finding even over the last couple of years with all the ups and downs,” Clarke said.
“It’s almost like it’s not really on the homebuyers’ minds. They just want to buy a house. When it comes to investors, I think they’re a little bit more calculated – but for someone that’s just looking to buy a home, I think it’s more of an emotional decision than it is about planning on what the market’s going to do.”
Canada’s housing market started 2025 with a rare mid-winter jump in new home listings, even as home sales weakened late in the month amid uncertainty over the potential for a trade war with the United States.https://t.co/0b9OCRKLH3
— Canadian Mortgage Professional Magazine (@CMPmagazine) February 19, 2025
Nova Scotia market remains robust despite economic uncertainty
Home sales across Nova Scotia remained below the five- and 10-year average for the month of January, but they jumped by 6.1% compared with the same time in 2024.
Active and new listings were also both higher, although the average selling price of a home climbed by 6.1% to $449,312.
That trend of rising prices coupled with higher rates, according to Clarke, has also seen first-time buyers take a more pragmatic and hard-headed approach to the market, setting their sights on a realistic property instead of holding out hope for a dream home right away. “I think it took years for people to kind of accept that in Nova Scotia,” he said.
“It used to be that you could be picky with what house you wanted, or ‘I want a big house but couldn’t afford it.’ But now, I feel like people are almost settling into this different reality and are more accepting: They seem to be more OK with changing their wants a little bit. In the beginning of my career, I didn’t really notice that.”
Trump plans loom over fixed-vs-variable debate
But the economic uncertainty caused by Trump’s threats may be impacting homebuyer sentiment in another way. While variable rates have been steadily on the way down in recent months – and are expected to fall further in 2025 as the Bank of Canada clips its benchmark rate – many borrowers are opting for the certainty and stability of a fixed rate, Clarke said.
“With the questions of tariffs and things like that, the people I’m talking to don’t feel any form of certainty in what’s going to happen and if rates will shift, whether up or down,” he said. “The conversation we’re having is that at least you can budget for it [with fixed].”
Whether or not Trump’s tariffs come into effect remains to be seen – but they factored into the national housing agency’s considerations about the outlook for Canada’s housing market, with the conclusion that they would have an impact but likely not trigger a meltdown.
Canada Mortgage and Housing Corporation (CMHC) mapped out three plausible scenarios for US tariffs on Canada in its latest housing market report, with its most extreme case suggesting job losses and a 2025 recession could be on the way – although a trade war could see inflation jump in the short term and a lower Bank of Canada policy rate to provide economic stimulus.
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