tariff turbulence puts sales on pause Tariff threats have upset what had been several months of improving sales activity in the Central Okanagan. After near-average sales in January, activity was down almost a third from typical levels in February.
restraining consumers’ spending intentions and businesses’ plans to hire and invest. Against this background, and with inflation close to the 2% target, Governing Council decided to reduce the policy rate by a further 25 basis points.” This “pervasive uncertainty” had the effect of significantly restraining housing market activity across Canada in February, including the Central Okanagan. Whereas sales typically rise 49% between January and February, last month saw sales rise by just 3%. And after sales came to within 2% of their long-run monthly average in January, the closest they have been to average since April 2022, that trend was completely reversed in February. Last month’s 243 MLS sales were 31% below the prior 10-year February average of 355. Subdued sales, in tandem with continued above average new listings, had the effect of pushing inventory higher in February. There were 2,357 active listings across the region at the end of the month, up 16% from last February and 47% above the prior 10-year February average (of 1,604 listings). For potential buyers who need to make a move, or those willing to see through this latest bout of uncertainty, the opportunities are abundant. Looking ahead, the general expectation for stronger housing market activity this year has quickly been turned on its head. While market seasonality typically sees activity build into the busy spring market, expect “macro-ality” to play an outsized role in the months ahead.
The threat of US-imposed tariffs on Canadian exports have hung overhead for months, but on March 4th, the nation woke up to find that those threats had become reality. While these tariffs were partially walked back over the course of the next two days—first with a one- month exemption on automotive exports, and then with a one-month exemption on all CUSMA-compliant exports—long-term damage has already been done to one of the closest economic, cultural, and diplomatic partnerships in history. For BC, the costs of a prolonged trade war with the US would be substantial, though on a relative basis, the province would fare better than others. In 2024, total merchandise exports from BC were $54.5 billion, of which 53% ($28.7 billion) went to the US. That paled in comparison to provinces like Alberta at 89% ($161.6 billion), Ontario at 77% ($194.9 billion), and Quebec at 75%
($91.0 billion). In fact, BC had the second- lowest US export exposure of any province in Canada. Still, finding new customers for tens of billions worth of goods and replacing trade relationships that have been decades in making would not come without significant challenges for businesses and labour. US tariffs on Canada will weigh on economic output and consumption, which is disinflationary. However, in response, Canada has announced a series of targeted retaliatory tariffs on US imports, which is inflationary. This puts the Bank of Canada in a difficult position when it comes to determining monetary policy. So far, the consensus among economists is that a trade war will lead to deeper interest rate cuts. The Bank’s decision to cut its policy rate on March 12th provided some insight into how it is navigating the situation. “The pervasive uncertainty created by continuously changing US tariff threats is
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