The Riz Team Blog

Posts Tagged ‘cambridge’

Impact of Tariffs on the Housing Market

Tuesday, March 4th, 2025

The introduction of new tariffs between the USA and Canada could have several implications for the Canadian housing market, particularly in Ontario, which is one of the most populous and economically significant provinces in Canada. Here are some thoughts on how these tariffs, along with other economic factors like interest rates and stock market performance, might impact the housing market:

1. Impact of Tariffs on the Housing Market

  • Construction Costs: Tariffs on imported construction materials (e.g., steel, aluminum, lumber) could increase the cost of building new homes. This would likely be passed on to consumers in the form of higher home prices, particularly in markets like Ontario where demand for housing remains strong.
  • Consumer Confidence: If tariffs lead to broader economic uncertainty or a slowdown in trade-dependent industries, consumer confidence could weaken. This might reduce the willingness of potential buyers to enter the housing market, particularly for higher-priced homes.
  • Regional Effects: Ontario, being a major manufacturing hub, could feel the impact of tariffs more acutely than other provinces. If businesses face higher costs or reduced access to U.S. markets, job losses or reduced wage growth could dampen housing demand in certain areas.

2. Proposed Interest Rates

  • Bank of Canada (BoC) Response: The BoC typically considers both domestic and global economic conditions when setting interest rates. If tariffs lead to slower economic growth or inflationary pressures (due to higher import costs), the BoC may adjust its monetary policy accordingly.
    • Scenario 1: If tariffs cause inflation to rise, the BoC might increase interest rates to curb inflationary pressures. Higher interest rates would make mortgages more expensive, potentially cooling the housing market.
    • Scenario 2: If tariffs lead to economic slowdown or uncertainty, the BoC might hold off on raising rates or even cut them to stimulate the economy. This could support housing demand by keeping borrowing costs low.
  • Current Trends: As of late 2023, the BoC has been cautious about raising rates too quickly as we went up with 12 interest rate hikes and we have a downward trend now into 2025 with the last 5 interest rate reductions, given concerns about household debt levels and housing affordability. Tariffs could add another layer of complexity to their decision-making process.

3. Stock Market Downturn and S&P 500 Decline

  • Wealth Effect: A decline in the stock market, particularly in the S&P 500, could reduce the wealth of Canadian investors who hold U.S. equities. This might lead to decreased consumer confidence and spending, including in the housing market.
  • Investor Behavior: A downturn in the stock market could make real estate a more attractive investment option for some investors, potentially increasing demand for housing. However, this effect might be offset by broader economic uncertainty.
  • Mortgage Rates: While the stock market and housing market are not directly linked, a significant decline in the S&P 500 could signal broader economic concerns. This might lead to lower bond yields, which could, in turn, result in lower fixed mortgage rates. However, variable rates would still be influenced by the BoC’s policy decisions.

4. Overall Housing Market Outlook in Canada

  • Short-Term: In the short term, the combination of tariffs, potential interest rate changes, and stock market volatility could create uncertainty in the housing market. This might lead to slower price growth or even price declines in some regions, particularly if buyer confidence wanes.
  • Long-Term: Over the longer term, the impact of tariffs on the housing market will depend on how they affect the broader economy. If tariffs lead to sustained economic weakness, the housing market could face headwinds. However, if the economy adjusts and growth resumes, the housing market could stabilize or even rebound.
  • Regional Variations: Ontario, particularly the Greater Toronto Area (GTA), may experience different effects compared to other regions. The GTA’s housing market is influenced by factors like immigration, foreign investment, and local economic conditions, which could mitigate or amplify the impact of tariffs and other economic factors.

Conclusion

The new USA/Canada tariffs, combined with potential changes in interest rates and stock market performance, create a complex environment for the Canadian housing market. In Ontario, the impact could be significant, particularly if tariffs lead to higher construction costs or economic uncertainty. However, the housing market’s resilience will depend on a range of factors, including the BoC’s monetary policy, consumer confidence, and broader economic conditions. While there may be short-term challenges, the long-term outlook will depend on how these factors evolve and interact over time.

Want to sit down on a one-on-one and talk about the market feel free to connect with us.  Fill out the form here: https://www.therizteam.com/contact

Local Events Happening in the Area

Friday, May 25th, 2012

New Hamburg Mennonite Relief Sale

May 26, 2012– 12:00 AM
Fun for the whole family. Enjoy one of Canada’s largest handmade quilt auctions, scrumptious food of Mennonite traditions: fleisch piroschki, verenki, rollkuchen, teaballs, apple fritters, pupusas, spring rolls, pork-on-a-bun, homemade ice-cream, fruit pies. Enjoy our famous strawberry pie. Purchase heritage plants and shrubs. Build a Toonie Tower! Children enjoy the inflatable equipment, mini auction and entertainment. Wheelchair accessible.   All merchandise and services are donated. Over 2000 volunteers donate time, expertise and resources.  All proceeds go to Mennonite Central Committee for world relief. A dollar spent is a dollar sent! Nearly $15 million has been raised since 1967. Admission and parking free.  Buses welcome. www.nhmrs.com   519-745-8458

Event Details:

Location:
Fairgrounds, 251 Jacob Street, New Hamburg, ON

Telephone: (519) 745-8458
Website: www.nhmrs.com

Waterloo Air Show 2012

June 2, 2012      to June 3, 2012– 10:00 AM to 5:00 PM
Bring the family out to one of the Region’s best summer events where aviation is showcased both in the air and on the ground. Highlighting the weekend will be a spectacular air show featuring the Canadian Forces Snowbirds, the Canadian Forces CF-18 Demonstration Team, the Canadian Forces SkyHawks Parachute Team (Sat only), aerobatics, historical aircraft and more. On the ground will be additional aircrafts to explore, displays, vendors, activities, performer autographs, food and much more. Bring your chairs and cameras out to the Region of Waterloo International Airport and let your wings soar!

Event Details:

Location:
Region of Waterloo International Airport

Telephone: (519)-465-0317
Website: www.waterlooairshow.com

Tips for Renovating Your Basement

Thursday, May 24th, 2012

Tips for Renovating Your Basement

Want to add more space to your home without  building up or out?  Look no further than  your basement.  According to the  Appraisal Institute of Canada, renovating a basement can give you a 50-75%  return on your investment when it comes to selling your home. Here’s how to get  it done right:

Start with a plan
What type of space does your family require?  Is it an extra living space for your teenager,  a playroom for the little one, or perhaps an entertainment area for all to enjoy?  Once you decide on how you want to utilize  the space, you can layout your design.  If  budget allows, an architect or interior designer could assist you with the  layout design and make valuable suggestions.

Do it  yourself or hire a professional
Depending on your skill set, budget, and time, you  may want to enlist the services of a contractor who has the expertise required  to finish a basement.  If you do it yourself and don’t have the required time or  skill to do the job correctly, you may find yourself looking at a repair bill  far exceeding the amount you originally thought the project would cost.  Make an informed decision.  Be sure to carefully weigh all  factors when deciding which option is right for you, while considering costs, material,  labour, and equipment requirements.

Framing
Framing basement walls and ceilings is one of the  most important aspects of any basement renovation. Two popular wall framing options are wood or steel studs. Wood is the classic  choice.  It is versatile, easy to work  with, and cost-effective.  Whereas steel,  although more costly, adds a level of strength, rot resistance and won’t warp  and crack like wood might over time.  Two  popular ceiling framing options are dropped ceiling tiles or drywall. Dropped  ceiling tiles provide easy access to pipes and wires which can be a saviour if a  tub or toilet on the main level floor springs a leak.  Alternatively, dry wall ceilings offer a  smooth finish and require less vertical space – a great option if your basement  ceiling height is already low.

Flooring
There are  plenty of basement flooring choices to choose from including laminate,  linoleum, vinyl, wood and ceramic tiles.   Be sure to match your flooring choice with the intended use of the space  and your geographic location.  For  example, a game room may require more durable flooring than an office.  Do you live in an area with a tendency for  flooding or is your location dry?  Carpet  with high density under pad will offer cushion and moisture protection from the  typical condensation found in basements.  Engineered hardwood made for below grade  installation will flex and handle moisture better than traditional hardwood. Ceramic  tile is great for bathrooms and laundry rooms and is easy to install on  concrete.

Add a bathroom
Installing a bathroom in the basement is a great  way to add value to your home.  Determine  if you require a full bathroom or if a powder room will suffice.  Powder rooms are relatively simple to  install, easy to keep clean, and won’t take up too much room.  Full three or four piece bathrooms can provide  a comfortable, private, and even luxurious, space for overnight visitors to  enjoy. With either option, time and costs can be reduced if bathroom fixtures  are located near existing plumbing and are arranged in a line on one wall.  Be sure to check local codes for plumbing and  electrical aspects of your project.

Add storage
No matter what kind of plan you come up with for  your basement, remember to factor in plenty of closet or storage space.  This will enable you to de-clutter the rest  of your home to keep it tidy and inviting.   Further, if you ever decide to move, having this extra storage space  should appeal to just about any prospective buyer.

A  finished basement can not only increase your home enjoyment but it can also add  valuable square footage.  From everyday  living to financial value, finished basements provide many benefits to you as a  homeowner.


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