What Trump's Presidency Means for Canada & Our Real Estate Market
I think I speak for (almost) all Canadians when I say that Donald Trump's win came as a wee surprise. Now that the shock has worn off, just weeks before he takes office, Canadians everywhere are asking what this means for us. While the rumour mill churns, I'm left wondering what Trump's presidency means for Canada and our real estate market. Will Vancouver too, get trumped?
The Trump effect on big banks
As news of Trump's win echoed around the globe, the world's financial markets felt the rumble. An article in Forbes reported that Goldman Sachs' stock ballooned by 30 per cent.
In case your memory is short, Sachs was one of biggest players in the 2008 U.S. housing market meltdown that plunged the world economy into the dark ages. And it gets better. Sachs' COO Gary Cohn will be the director of the White House National Economic Council in the Trump Administration as announced earlier in December. "With Cohn advising President Trump, Goldman Sachs will have one of its own advocating on economic policy," Forbes stated.
This move is relevant to Canada and our housing market insofar as the strength of the U.S. dollar affects us in myriad ways. If the American economy continues to react positively, a stronger U.S. dollar could send even more buyers north of the border.
Realtors' signs are hung outside a newly sold property in a Vancouver neighbourhood where houses regularly sell for C$3-C$4 million Sept. 9, 2014. (Photo: REUTERS/Julie Gordon )
Since Trump's win, the U.S. dollar hit an 11-month peak. A report from Fortune held that according to economists, this is likely due to the possibility of "faster inflation and wider budget deficits, if president-elect Donald Trump should go on a U.S. spending spree..." In contrast to the buoyed U.S. buck, Mexico's peso took a beating like an emptied-out piñata. In Canada, our aptly named Loonie has been left trembling as Canada holds its breath to see if Trump's stance on free trade holds. If so, the Loonie could plunge even further below its counterpart.
Pedal to the metal on Canadian mining
In contrast to the Canadian dollar, the mining sector saw shares of many companies rise in response to the former reality TV star's promise of major infrastructure spending. As a result, the price of copper alone rose around 30 per cent. Relied upon heavily in infrastructure, the metal is used for electric cables that power cars, telecommunications, and manufacturing.
Location, location, location
MoneySense reported recently that Trump's win could have a positive outcome for home sellers in Canada. One possibility is that an increase in demand could come from those who decide to pack up and head north. This demand could buffer current housing prices, particularly if the U.S. dollar holds its current strength. But MoneySense also remarked that the GVA's new Foreign Buyer tax would likely negate any American interest.
One thing is for sure: no one knows what to expect.
The sentiment that Vancouver real estate will not see much effect as a result of Trump's win was echoed in a piece published by the Toronto Star. In a statement from Canadian Real Estate Association chief economist Gregory Klump, "It's too early to know what it means for Canadian housing markets. Nobody knows what it means for the Canadian economy writ large, let alone housing markets across the country."
It could however, make Canada look "more attractive" to American buyers looking for investment property. Canada's welcoming, tolerant stance in the face of Trump's increasingly secular sentiments could provide a breath of fresh air for our American neighbours. Personally, I have seen an increase in inquiries from American residents looking at purchasing either a second home or an investment property in B.C. With a strong U.S. dollar, even the 15 per cent non-resident tax is not proving to be much of a concern for our friends south of the border.
As the dust settles after the American presidential election, one thing is for sure: no one knows what to expect. With Trump's blatant disregard for honouring his promises, the implication of his presidency on Canada is impossible to assess.
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Location: Stuart Lake, B.C. Price: $175,000 American Island is 8 acres (3.24 hectares) in size, and has a kilometre of shoreline to run around on. The island is the seventh-largest in B.C., running 90 kilometres north-south, and 13 kilometres east-west. It has plenty of trees, and two bays good perfect for mooring boats. (Photo: PrivateIslandsOnline.com)
Location: Stuart Lake, B.C. Price: $85,476 Like American Island, Sweet Island is also in Stuart Lake — a great spot fishing rainbow trout, char, lake trout, and sturgeon. Sweet Island has a high elevation with no cliffs and boasts tons of pine and aspen trees. There's already old house for accomodation, and a half-acre clearing for a garden. The entire island is 66 kilometres long, 10 kilometres wide, and has 170 kilometres of shoreline. And if anyone ever needs a break on the mainland, the town of Fort St. James is also on Lake Stuart's shoreline with full services like lodges and motels. (Photo: Private Islands Online)
Location: Tusket Island Chain, Yarmouth County, N.S. Price: $65,000 A great place for a summer retreat, the Big Tusket Island Parcel is actually two pieces of land that total 37 acres of size. The chain, a group of granite islands located off of Nova Scotia's Southwestern coast, is primarily uninhabited. The islands offer a very natural environment and is home to a number of unique lighthouses. There's electricity on both islands, and amenities are available in Comeau's Hill — an attractive Acadian coastal town. (Photo: PrivateIslandsOnline.com)
Location: Lama Passage, B.C. Price: $249,000 Lizzies Cove Island is a magnificent 6.5-acre, virgin-forested island with almost two kilometres of ocean front. Cruise ships and killer whales regularly pass by one side of the island, and fishing in the area is "superb," according to its listing. The nearby town of Bella Bella offers plenty of amenities, including a hospital, post office, and liquor store. (Photo: Private Islands Online)
Location: Mahone Bay, N.S. Price: $90,000 At 11.5 acres, Tancook Island is the largest island in Mahone Bay — an area with lots of fishing and about 125 year-round residents. (Photo: Private Islands Online)
Location: Stuart Lake, B.C. Price: $431,482 Johnson Island is a private, 20-acre space that has been occupied by the same family since 1947. It has about one kilometre of shoreline, and the cabin's beachfront has stunning views of the northern lights and stunning sunsets. The cabin, built in 1949, is made of reclaimed old growth timber from the island. It has a large front room divided into a kitchen, as well as a comfortable dining room. The house, which sleeps six people, also has a detached shower room and smokehouse. Access is by float plane or boat, the latter of which can be launched from the nearby village of Tachi. (Photo: Private Islands Online)
Location: Ontario, near Manitoulin Island Price: $103,000 Little Island, or Jenny Island, is a historically significant commercial fishing outport, where the fisherman and their families lived for the season during the 1800s and early 1900s. The land is accessible both by boat and by plane. (Photo: Private Islands Online)
Location: Southern Gulf Islands, B.C. Price: $380,000 This 7.5-acre property has been left entirely in its natural state. Located in the southern Gulf Islands, it's a completely private island with an impressive fir forest. The island isn't far from Ladysmith, and sits in the Stuart Channel. (Photo: Private Islands Online)
Location: Mitchell Bay, N.S. Price: $150,000 Just 290 metres from the mainland, Tidmarsh Island has 24 acres of land that boats a thick forest a natural cove for mooring. Halifax is about two hours away, and the town of Sheet Harbour — with shops and amenities — is less than a half-hour trip. (Photo: Private Islands Online)
Location: B.C. Price: $449,000 Echo Island, which is a 25-minute flight in a float plane from Williams Lake, is made up of four, one-acre lots. There's a dedicated road just for the island, a bridge crossing for ATVs, and pedestrian access from mainland to island. There's also a 15-metre dock neighbouring the two-bedroom cabin. (Photo: Private Islands Online
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