Recent U.S. tariff hikes are expected to slow economic growth in Canada, including Saskatchewan, and increase inflation. The OECD forecasts that these tariffs will drag down growth in Canada, Mexico, and the United States while driving up inflation.
In February 2025, Canadian home sales experienced the most significant decline in nearly three years, with a 9.8% drop from January and a 10.4% year-over-year decrease. This downturn is largely attributed to economic uncertainty stemming from the trade conflict, leading potential buyers to hesitate on major financial commitments.
In Saskatoon, the real estate market showed resilience in 2024, with over 5,035 home sales—a remarkable 8% increase compared to 2023. However, the recent trade tensions and resulting economic uncertainty may temper this growth in 2025. Mortgage rates are expected to continue falling, which could stimulate demand, but the overall market sentiment may remain cautious due to tariff-related concerns.
Builders are also feeling the impact, with rising construction costs linked to tariffs on materials like lumber. This has led to reduced builder confidence and, in some cases, price reductions to attract buyers. However, these measures may not fully offset the increased costs, potentially leading to higher home prices in the long term.
In summary, while Saskatoon's real estate market has shown strength, the economic uncertainty and increased costs associated with U.S. tariffs are likely to introduce challenges in the spring and summer of 2025. Buyers may face higher prices and potentially higher mortgage rates, while sellers might experience longer listing periods as market sentiment adjusts to the evolving economic landscape