real (estate) talk | July 2025

After what felt like a few months of calm relative to the hurricane of US tariff policy earlier this year, tariffs are once again front of mind following a series of threats by the US President. In recent weeks, dozens of countries have received notices of new nation-specific “reciprocal” tariff rates, ranging from 20% to 50%, which are set to take effect August 1st unless new trade agreements are reached before then. The timing of these notices corresponds with the end of the 90-day pause on the first iteration of “reciprocal” tariffs that were announced back in April. While that announcement was met with sharp financial market volatility, this time around the market’s response has, so far, been relatively mute.

For Canada, the latest threat will see a 35% tariff applied on all US-bound exports excluding those already being levied by sector-specific tariffs (i.e., steel, aluminum, and autos). Like the 25% economy-wide tariff that is currently in place, CUSMA-compliant goods will continue to be exempt, and the lower 10% tariff on non-compliant energy exports will likely remain. The CUSMA exemption has allowed more than 90% of exports to the US to remain duty-free, which has put Canada in a more favourable position relative to other countries.

In addition to “reciprocal” tariffs, the US will begin levying a 50% tariff on all copper imports on August 1st. About half of Canadian copper gets exported to the US, and BC accounts for about half of Canadian production. However, given that the majority of BC’s copper goes to Asia, the province will largely be sheltered from said levies. Like the existing 50% tariffs on steel and aluminum, copper tariffs will disproportionately impact Ontario and Quebec.

While the CUSMA exemption has saved Canada from more dire outcomes, tariffs have nonetheless weighed heavily on the economy, including real estate activity. Heading into this year there was an expectation that reduced borrowing costs, elevated inventory, and more favourable mortgage insurance rules would see activity recover from the prior two years, which were significantly suppressed due generationally-high interest rates. Instead, the Vancouver Region is on pace for the third-fewest sales in over 20 years. 

Through the first half of 2025, there were 17,856 MLS sales in the region, down 16% year-over-year (from 21,258) and 34% below the past 10-year average (of 27,047). In available data back to 2005, only 2019 (17,318 sales) and 2020 (17,603) registered fewer sales in the first half of the year. Though activity has increased from the lows of March and April, June’s 3,329 sales were still down 9% year-over-year (from 3,646) and 32% below the past 10-year June average (of 4,887). Active listings continued to grow to 26,593 at the end of the month, the highest level since July 2012.

Right now, Canada is actively negotiating a new trade and security agreement with the US to avoid an escalation of tariffs on August 1st. Should that prove unsuccessful, then further headwinds are potentially en route for Canada, and weak consumer confidence will continue to weigh on real estate activity through the second half of the year.

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⁠⁠⁠The rennie review is a monthly publication that includes our take on the latest MLS data for the Vancouver Region. In addition to presenting neighbourhood-level stats, it includes information on current rennie projects, a selection of featured listings, and insightful commentary on how and why the market is changing.

Our rennie intelligence division comprises our head economist, market analysts, and data scientists. Together, they empower individuals, organizations, and institutions with data-driven market insight and analysis. Experts in real estate dynamics, urban land economics, the macroeconomy, shifting demographics, and data science, their industry-leading data acquisition, analytical systems, and strategic research supports a comprehensive advisory service and forms the basis of frequent reports and public presentations, covering the Vancouver, Kelowna, Victoria, Seattle, and Coachella Valley marketplaces. Their thoughtful and objective approach embodies the core values of rennie.