How Could U.S. Tariffs Affect Calgary’s Residential Housing Market?

Will U.S. Tariffs Affect Calgary's Real Estate Market?

Many potential homebuyers and sellers are asking how U.S. tariffs could affect Calgary’s residential real market. The most common questions our team of Realtors® have been getting include:

• Will U.S. tariffs increase home prices, and by how much?
• Will U.S. tariffs decrease the value of my home?
• How else will U.S. tariffs affect my next real estate transaction?

These are all important questions when considering selling or buying a home in Calgary, an unfortunate reality but one we all must deal with due to the increasingly difficult trade relationship with our largest trading partner.

As a team of highly experienced Realtors®, we break down how U.S. tariffs could affect Calgary’s housing market and what they may mean for your next real estate transaction.

If you have questions about how tariffs may affect your next home purchase or sale, please don’t hesitate to contact our team of professionals – we are here to help!

Key Points

1. Tariffs may increase the cost to build new homes in Calgary, and those costs will be transferred to the buyer
2. Tariffs could indirectly affect resale home prices in Calgary as a result of the slowed economic downturn and loss of buyer confidence
3. Supply chain disruptions from tariffs could lead to further construction delays and/or indefinite project cancellation by developers
4. Housing inventory could rise, potentially moving the market further towards buyer's territory
5. Mortgage rates could drop, but the resulting effects could counteract any gains in housing affordability for Calgarians
6. Calgary's residential housing market is highly resilient and has weathered tough economic conditions in the past

Will U.S. Tariffs Increase Calgary Home Prices?

Yes. Tariffs are likely to significantly impact home prices in the Calgary Metropolitan Area (CMA) for buyers and sellers. This is due to many factors, including the potential for higher construction costs, regional economic slowdown, growing housing inventories, softened housing demand, supply chain disruptions, and mortgage rate adjustments.

The experts agree. According to Kevin Lee, CEO of the Canadian Homebuilders’ Association (CHBA), U.S. tariffs will drive up construction costs and affect housing affordability nationwide.

“A trade war started by U.S. tariffs would really be an unfortunate and problematic thing for housing in Canada,” said Lee, via reporting by Global News.

Higher Construction Costs for Homebuilders

For Calgary new construction homes in particular, U.S. tariffs on imported materials such as steel, glass, aluminum, and drywall could significantly impact the cost of new builds. Many construction materials used by homebuilders in Canada are sourced from or pass through the U.S.; as a result, tariffs will increase costs for builders and also potentially cause construction timeline delays due to supply chain disruptions.

According to Lee, Canada imports $3.5 billion in glass products, $3 billion in major appliances, and $2 billion in hardware from the U.S. every year (1). Furthermore, primary metals such as steel and aluminum would be hit hard, with Statistics Canada showing our country imported more than $14 billion worth from the U.S. in 2023 (1).

We contacted a local infill home builder in Calgary to discuss approximate costs for a new build. They said that lumber, plumbing materials, drywall, and metal products such as electrical wiring and appliances could easily go up by 10% to 15%. According to the builder, this translates to up to ~$35,000 for new backyard suite builds and up to ~$80,000 or more for infills*.

***Please note: These figures largely depend on what happens with lumber costs says the builder, which has only seen minimal cost increases for construction materials to date.

Higher Costs for Materials and Appliances

Most of the drywall used in Canada is manufactured in Mexico and shipped through the U.S. Also, a majority of household appliances such as air conditioners, refrigerators, dishwashers, and laundry machines are made in America including brands like Whirlpool, KitchenAid, GE, and even some Samsung products (2)(3)(4). Many metal and plumbing products used in new home construction are also made in the U.S. including sinks, venting, piping, and furnaces to name a few (5). These added costs will undoubtedly be put onto the homebuyer.

Replacement parts for used household appliances are also manufactured in the U.S. As a result, expect to see the cost of repairs and/or new parts skyrocket as a result of tariffs between our two countries. So, if you’re an existing homeowner who needs repairs, you’ll likely feel the economic impact of tariffs as well.

Impact of an Economic Slowdown

Tariffs typically result in higher prices for goods and services, which could curb household spending as families become concerned about paying for their bills, resulting in decreased economic activity. Additionally, many Calgarians are concerned about their livelihoods, as many jobs could be affected by tariffs.

According to Global News, several municipalities in Alberta are worried about layoffs in the oil and natural gas sector due to tariffs. And rightly so. The sector accounts for more than 1/5th of Alberta’s gross domestic product and roughly 130,000 jobs across the province (6).

“An economic slowdown or recession always translates directly into less housing starts because of uncertainty, potential job loss, etc., so that would be the number one concern for our industry,” said Lee, CEO of the CHBA.

With less money in the economy, new home construction starts are likely to drop as many potential buyers put their home ownership aspirations on hold for the time being.

Will U.S. Tariffs Decrease the Value of Calgary Homes?

“Of course, resale homes, the sale of existing housing won’t be directly impacted," says Royal LePage CEO Phil Soper via reporting by Global News.

However, as Soper does not mention, there could likely be indirect tariff impacts on resale properties across Calgary. Home sellers could be affected not so much a result of increased costs for homebuilding materials, but a result of the ensuing economic and market consequences.

Growing Housing Inventories

The Calgary Real Estate Board’s latest report showed increasing housing inventories in the residential market. As of February, for the second month in a row, inventory levels saw significant year-over-year growth, growing 76% to 4,145 units. The overall months of supply were 2.4, more than double at this time last year.

“Even though more people listed their homes for sale, there were actually fewer sales than in February 2024. So, we’re seeing the seller’s market of the past two or three years ease off,” said Alan Tennant, CREB®’s President and Chief Executive Officer (7).

“In turn, that’s caused the pace at which prices are increasing to slow down a bit, which should come as welcome news for buyers.”

If Calgary’s inventory levels continue to grow as a result of the economic uncertainty created by tariffs and push the market into buyer’s territory, it is very possible that benchmark prices could drop. Now, having said that, each segment of the market will likely react differently to tariffs, so each would have to be evaluated on its own merits.

Softened Housing Demand

U.S. tariffs could indirectly dampen housing demand in Calgary’s residential market by adversely affecting the economy. If, for example, a potential buyer loses their job and income as a result of the tariffs, they are unlikely to continue to pursue buying a home.

Calgary’s Spring housing market is typically the most active as buyers and sellers look to relocate when the weather warms up. However, the uncertainty in the Canadian economy created by tariffs could make many people more hesitant to pull the trigger as their financial confidence wavers.

According to CREB®’s February report, year-over-year sales have dropped by 19%, while year-to-date sales have dropped by 16% (7). While many factors contribute to reduced housing demand, tariffs have undeniably weighed heavily on the minds of homebuyers and sellers in Calgary.

Shift in Rental vs. For-Sale Markets

With a total of 5,500 new rental units completed in 2024 in Calgary, the city say its rental vacancy rates jump from around 1.3% to 4.5%. As a result, rental prices are dropping significantly across the city, according to Avison Young (8).

When combined with the economic uncertainty created by tariffs, Calgary’s residential market could see considerable drop in housing demand as more people opt for affordable rental options versus buying a property.

More Insights into How U.S. Tariffs Could Affect Calgary’s Housing Market

Supply Chain Disruptions

Supply chain disruptions could also cause significant adverse effects for homebuyers and sellers in Calgary. U.S. tariffs on Canadian wood products, for example, could very well result in the shut down of Canadian-based saw mills and other forestry operations, reducing market supply of lumber and sending prices upward.

Tariffs are already causing layoffs and operational shutdowns in other Canadian sectors, particularly in the aluminum and steel industries. In February, for example, Canada Metal Processing Group laid off 140 workers due to tariffs.

Additionally, the U.S. is Canada’s top supplier of wood; in 2023, it exported $3.4 billion worth of wood products to Canada, according to the Observatory of Economic Complexity (9). With the potential for increased/counter tariffs on these goods, lumber could very well become more expensive for Canadian homebuilders across the country, including those in Calgary, Alberta.

Impacts on Mortgage Rates

U.S. tariffs can influence Canadian mortgage rates in several ways.

Lower Bond Yields: Tariffs often spur economic uncertainty, driving investors toward safe-haven assets like government bonds. This increased demand pushes bond yields lower, and because Canadian mortgage rates are closely tied to bond yields, a drop in yields can lead to reduced mortgage rates.  We’ve already seen this happen; according to Canadian Mortgage Trends, Canada’s 5-year bond yield has dropped to its lowest level since June 2022.

Monetary Policy Response: Facing a slowdown or recessionary pressures, the Bank of Canada may implement accommodative monetary policies such as interest rate cuts, which can lower borrowing costs. However, if tariffs also trigger inflationary pressures, this might later require tightening monetary policy, potentially complicating the overall trend.

Impact on Calgary’s Housing Market

The changes in mortgage rates driven by U.S. tariffs could have mixed effects on Calgary’s housing market:

Enhanced Borrowing Power: Lower mortgage rates reduce the cost of borrowing, making home financing more affordable. This can stimulate demand among prospective homebuyers, potentially bolstering the market even in an uncertain economic climate. However, if it pushed Calgary’s residential market into buyer’s territory, homeowners could see their properties sell for less.

Economic Spillover Effects: Calgary’s economy is closely tied to the energy sector, which could be adversely affected by tariffs or export taxes on energy. Job losses or reduced incomes in this key sector might dampen overall housing demand, offsetting the benefits of lower mortgage rates.

Dynamic Market Adjustments: If lower rates encourage home purchases while construction costs rise because of tariffs on imported materials, there might be a supply-demand imbalance. On one hand, increased demand due to affordability can support home prices. On the other hand, reduced construction or increased costs can limit new supply, potentially leading to volatile market adjustments.

U.S. tariffs can lead to lower Canadian mortgage rates through the mechanism of reduced bond yields and accommodative monetary policy, improving home purchasing affordability in Calgary. However, if tariffs negatively affect key sectors like energy, the subsequent economic slowdown could dampen consumer confidence and housing demand, potentially counterbalancing the benefits of lower mortgage rates in Canada.

Investor Uncertainty

If economic uncertainty prevents investors from mobilizing capital, then it could tighten housing availability in Calgary. For example, new projects could be delayed or renovation projects postponed due to unpredictability in construction costs and material prices resulting from tariffs.

It is common knowledge that investors tend to sit on their money when unstable economic conditions persist. And with U.S. tariffs, the longer they go on, the harder Canada’s economy will be hit at large, potentially putting investor plans to build new homes on ice for many months, or even years.

Calgary's Housing Market is Resilient

According to CREB®'s 2025 forecast, Calgary's housing market is expected to "stay strong" despite reduced migration levels and elevated economic uncertainty.

CREB® forecasts 26,000 total units sold; however, significant economic risks could slow sales activity.

“While we anticipate stable sales levels overall, market dynamics will shift as rental rate adjustments and supply improvements influence different segments of the housing market,” said Ann-Marie Lurie, CREB's Chief Economist at her organization's conference and trade show in January (10).

“While the market is expected to be more balanced than in recent years, significant economic risks — such as potential tariffs — could impact activity.”

So while risks to Calgary's residential real estate market from tariffs remain, our resilient housing sector has weathered storms before - and it seems we'll be okay this time around too.

How Will Tariffs Affect Your Calgary Home Transaction?

Overall, U.S. tariffs and the potential for counter economic policies will likely significantly impact Calgary’s residential housing market in one way or another. If you’re considering buying or selling a home in the area at this time, it’s imperative to weigh out your goals and get the best advice.

As highly experienced local real estate agents and professional Realtors®, we have the know-how and expertise to help you achieve a successful transaction, no matter the circumstances!

Contact Cody, Jordan and the Calgaryism Real Estate Team anytime to discuss your goals! We look forward to connecting with you!

SOURCES:

_{1 - https://globalnews.ca/news/10986937/us-canada-tariff-war-housing-impact/
2 - https://allamerican.org/investigation/whirlpool/
3 - https://www.geappliances.com/ge/usa
4 - https://www.itsjustplumbsmart.com/which-hvac-is-made-in-the-usa/
5 - https://www.bmicanada.com/
6 - https://www.jobbank.gc.ca/trend-analysis/job-market-reports/alberta/sectoral-profile-mining-oil-gas
7 - https://www.creb.com/-/media/Public/CREBcom/Housing_Statistics/Calgary_Monthly_Short_Summary.pdf
8 - https://www.avisonyoung.ca/w/2024-sees-record-amount-of-new-purpose-built-residential-rental-units-added-to-the-market-in-calgary
9 - https://oec.world/en/profile/bilateral-product/wood-products/reporter/can
10 - https://calgaryherald.com/business/local-business/calgary-housing-market-strong-despite-tariff-uncertainty-creb}