What Is the Trump Effect on Toronto & Vancouver Real Estate Markets?
The night of the American presidential election, the CIC website crashed. Thousands of Americans, terrified by the prospect of Trump-as-president, began to research how they could become new Canadians. During Trump’s campaign, Liberal Americans had been flippantly threatening to move to Canada should he become president-elect, and as the inconceivable became reality, they began to investigate their options. Following the election, when Ontario finance minister Charles Sousa was asked how Trump-as-president could affect Canadian real estate, he said, “Our brand — call it strong, fair, tolerant and welcoming — could stand out even more clearly now as a desired place to invest capital in real property”. As Canada begins to look inviting to overseas investors, refugees, and other new immigrants who fear Trump’s isolationist economic promises and open xenophobia, Toronto and Vancouver’s already overburdened and inflated housing market could see an influx of even more foreign money, which will likely sustain and increase the demand for, and cost of, housing.
At the Sports Media Canada luncheon on November 10th, Raptors GM, Masai Ujiri, jokingly thanked Donald Trump, “…for making Toronto an unbelievable sports destination,” suggesting that NBA free agents might find a safe haven in Canada. Of course, the reality is that it is not easy to become a Canadian citizen unless you have NBA super-star status, but Ujiri’s comment enunciated an increasingly popular sentiment: that in the wake of Trump’s success, Canada is beginning to look increasingly attractive and stable. With the USD valued at 30% more than the Canadian dollar, Americans have nearly one third more buying power than Canadians whether they are citizens or not. Canadian regulators will have to act quickly to make sure that the foreign-buyer tax is active in Ontario, but beyond that the real fallout of the Trump Effect remains to be seen.
Hold on to your hats!
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