Canada

Calgary Real Estate News

Eight areas to monitor to protect your home’s value and avoid costly repairs.

Whether old or new, a home is an investment worth protecting.

“The difference between a house the owner has paid attention to and one they have not can be amazing,” said Mike Becker, a home inspector for Calgary and surrounding areas with Pillar to Post Home Inspectors.

Homeowners can maintain the value of their investment by monitoring these areas of the home:

1. Property and Site

“After buying a new home, the grade and property may be in a state of settling and the most important part of this will be drainage,” said Becker. “Mature lots will typically have good drainage, but should still be monitored, particularly after major runoffs or new landscaping.”Watch for:

  • Drainage must move away from the structure.
  • Monitor during snow melts and heavy rain.
  • Most newer lots require some regrading once they settle, sometimes five to 10 years out, but always monitor.

Investment:

  • Repairs = $3 to $6 per square foot.

2. Roof

Michael Babisky, general manager at Astoria Homes, said the top concern for Calgary homeowners should be regular roof inspections. “I recommend every three to six months, especially with the frequent wind and hail here.”Watch for:

  • Implement a regular maintenance schedule for shingles and flashings after five years.
  • Characteristics of shingles near the end of usefulness: curling up, rounded edges and granule surface wearing off.
  • Caulking usually lasts three to five years and should be refreshed.
  • Inspect after severe weather.

Investment:

  • Gutter cleaning = $150 to $300.
  • Gutter replacement = $7 to $9 per linear foot.
  • Asphalt replacement = $3 to $7 per square foot.

3. Exterior

“The majority of houses are being done with vinyl siding – a good, long-lasting material, assuming it has been installed correctly,” said Becker. “Wall covering, such as siding or stucco, nearing end of life are usually very apparent.”Watch for:

  • Loose or incorrectly fitted siding around openings, where moisture can reach the structure or wind might blow siding off. Seal holes with caulking and replace damaged pieces.
  • Exterior penetrations, such as those around gas lines/meters and furnace venting, require yearly re-caulking.

Investment:

  • Repairs = $5 to $6 per square foot.
  • Replacement can be more economical than repair costs.

4. Attic

“Typically, people are only accessing the attic if they are running wires or when something has already gone wrong, especially leaks,” said Becker.Watch for:

  • Condensation from the living area can build up and stain the ceiling, or worse. • Check for condensation when it’s cold outside. Look for signs of frost on the sheathing or around the attic hatch.
  • Over time, attic insulation can lose volume, reducing its R value. Improve thermal efficiency by adding more insulation.

Investment:

  • Insulation = $2 to $5 per square foot.

5. Structure

“Usually, if there are structural problems, they’re not something that can be fixed with maintenance,” said Becker. “But monitoring is best.”Watch for:

  • Doors not opening and closing properly anymore.
  • Cracks in finishing might indicate structural problems, but don’t always require action. Monitor over time for possible moisture penetration or foundational movement.

6. Electrical

“Nearly every do-it-yourself home renovation project I have seen (involving electrical) has safety issues,” said Becker. “Get an electrician, I cannot say this enough.”Watch for:

  • Mis-wired receptacles can damage electronics or cause shocks, sparks and/or fires.
  • Professional installations should be maintenance-free unless something fails, like a ground fault circuit breaker/receptacle. These should be replaced.
  • A very hot distribution panel might indicate problems. Don’t touch it, call an electrician.

Investment:

  • Repairs = $150 to $250 per hour, plus material costs.

7. Heating

“There will come a time when replacing the furnace heating system will be more economical than the repairs and maintenance, but I have inspected many houses with furnaces 25-plus years old that have been well maintained,” said Becker.Watch for:

  • Prior to winter each year, Becker suggests opening the front panels to take a picture of the furnace for yearly comparison. Water or rust indicate it might be time for inspection.
  • Yearly furnace cleaning is key to maximizing its life, Babisky says. “Clean the humidifier at the same time.”
  • Replace filters every six months.
  • After 10 years, implement a regular furnace maintenance schedule, with inspection by an HVAC professional.

Investment:

  • Annual service and cleaning = $250 to $500.
  • Furnace replacement = $3,600 to $4,700.

8. Plumbing

“Get leaks fixed as soon as possible,” said Becker.Watch for:

  • Leaks around slow-draining sinks, bathtubs and showers.
  • Less available hot water or the pilot light repeatedly going out. Repairs can often add years to appliances.
  • Water heaters typically last 10 to 15 years, but can fail at any time, usually unexpectedly.

Investment:

  • Repairs = $150 to $250 per hour, plus material costs.
  • Water heater replacement = $800 to $1000.

 

-Natalie Noble

Calgary Real Estate News

Canadian home sales fall to lowest level in five years

Canadian home sales fell to the lowest in more than five years in April, as tougher mortgage qualification rules deterred buyers.

The number of homes sold last month declined 2.9 per cent from March, the Canadian Real Estate Association said Tuesday from Ottawa. Declines were recorded in about 60 per cent of cities tracked including Vancouver, Calgary, Toronto and Montreal.

It was a disappointing start to the busy spring selling season for realtors that suggests markets are still struggling with tougher rules that require borrowers to prove they can afford to cope with higher interest rates. Policy makers made the changes along with other steps, such as foreign buyers taxes, to put the brakes on a surge in price gains last year that some fear could be a danger to the financial system.

The drop in April is the third monthly decline this year, with sales down over 20 per cent since December. The new mortgage qualification rules kicked on Jan. 1.

“This year’s new stress test has lowered sales activity and destabilized market balance for housing markets in Alberta, Saskatchewan and Newfoundland,” CREA economist Gregory Klump wrote in the report. “This is exactly the type of collateral damage that CREA warned the government about.”

Even with the drop in sales, prices are still holding up. The benchmark index climbed 0.6 per cent on the month, and is up 1.5 per cent from a year ago.

The number of new homes listed for sale also declined 4.8 per cent in April.

-Bloomberg News

Calgary Real Estate News

TD Bank drops 5-year variable mortgage rate as competition among big lenders heats up

TD Bank is joining a rival bank in offering a highly discounted variable mortgage rate as competition among Canada’s biggest lenders heats up.

The Toronto-based bank said Tuesday it’s lowering its five-year variable closed rate to 2.45 per cent, or 1.15 per cent lower than its TD Mortgage Prime rate, until May 31.

TD’s special rate follows last week’s move by the Bank of Montreal, which discounted its variable mortgage rate to 2.45 per cent until the end of May.

Canada’s lenders often offer special spring mortgage rates as homebuying activity picks up, but Robert McLister — founder of rate comparison website RateSpy.com — said last week that BMO’s special discounted variable rate was the biggest widely advertised discount ever by a Big Six Canadian bank.

TD’s discounted rate on Tuesday brings its variable mortgage rate offer in line with BMO’s.
“TD is not lying down,” McLister said Tuesday. “Mortgage growth is the lowest since 2001, you’ve got interest rates going up, and less people getting mortgages because of that… They have the ability to match this rate and still make money.”

TD spokeswoman Julie Bellissimo says its special five-year variable rate applies to new and renewed mortgages, as well as the variable rate term portion of certain TD home equity lines of credit.

“We are confident this is a strong offer for new and renewing customers, while ensuring we remain competitive in a changing environment,” Bellissimo said in an emailed statement.

The moves come amid slowing mortgage growth. The Canadian Real Estate Association said Tuesday that national home sales volume sank to the lowest level in more than five years in April, falling by 13.9 per cent from the same month last year. The national average sale price decreased by 11.3 per cent year-over-year.

Home sales have slowed due to various factors, including measures introduced by the Ontario and B.C. governments to cool the housing market, such as taxes on non-resident buyers.

Other headwinds for mortgage growth include higher interest rates and a new financial stress test that makes it more difficult for would-be homebuyers to qualify with federally regulated lenders, such as the banks.

As of Jan. 1, buyers who don’t need mortgage insurance must prove they can make payments at a qualifying rate of the greater of two percentage points higher than the contractual mortgage rate or the central bank’s five-year benchmark rate. An existing stress test also stipulates that homebuyers with less than a 20 per cent down payment seeking an insured mortgage must qualify at the central bank’s benchmark five-year mortgage rate.

The tighter lending rules are making it harder for homebuyers to qualify for uninsured mortgages, and shrinking the pool of qualified buyers for higher-priced homes, CREA’s chief economist Gregory Klump said in April.

Meanwhile, Canada’s largest lenders all raised their benchmark posted five-year fixed mortgage rates in recent weeks as government bond yields increased, signalling a rise in borrowing costs.

In turn, the central bank’s five year benchmark qualifying rate — which is calculated using the posted rates at the Big Six banks — increased last week to 5.34 per cent. This qualifying rate is used in stress tests for both insured and uninsured mortgages, and an increase means that the bar is now even higher for borrowers to qualify.

As well, since July, the Bank of Canada has raised interest rates three times to 1.25 per cent, putting added pressure on consumers. But a rising interest rate environment also means that the margins — or profit made on loans — on mortgages for banks will improve if interest rates rise. Rising interest rates also drive up demand for fixed-rate mortgages, and banks may discount variable mortgage rates in an effort to balance the books, according to McLister.

-Calgary Herald

Calgary Real Estate News

Mortgage Loan Insurance: Quick Reference Guide

This handy quick reference tool provides helpful information to submit applications to CMHC for homeowner and small rental loans, for all CMHC programs: Purchase, Improvement, Newcomers, Self-Employed, Green Home, Portability, and Income Property.

Benefits of mortgage insurance

Some of the benefits of CMHC mortgage loan insurance include:

  • Available for purchase of an existing residential property with or without improvements and for new construction financing.
  • Our Green Home program offers a partial mortgage loan insurance premium refund of up to 25%. Refunds are available directly to borrowers who buy, build or renovate for energy efficiency using CMHC-insured financing. Find out more with our Green Home Program.
  • Self-employed borrowers with documentation to support their income have access to CMHC mortgage loan insurance.
  • Our portability feature saves money for repeat users of mortgage loan insurance by reducing or eliminating the premium payable on the new insured loan for the purchase of a subsequent home.

Loan-to-Value (LTV) ratios

For homeowner loans (owner-occupied properties), the Loan-to-Value ratio for 1–2 units is up to 95% LTV. For 3–4 units, the ratio is up to 90% LTV.

For small rental loans (non-owner occupied), the ratio is up to 80% LTV.

Minimum equity requirements

For homeowner loans, the minimum equity requirement for 1–2 units is 5% of the first $500,000 of lending value and 10% of the remainder of the lending value. For 3–4 units, the minimum equity requirement is 10%.

For small rental loans, the minimum equity requirement is 20%.

Purchase price / lending value, amortization and location

For both homeowner and small rental loans, the maximum purchase price / lending value or as-improved property value must be below $1,000,000.

The maximum amortization period is 25 years.

The property must be located in Canada and must be suitable and available for full-time, year-round occupancy. The property must also have year-round access including homes located on an island (via a vehicular bridge or ferry).

Traditional and non-traditional down payments

A traditional down payment comes from sources such as savings, the sale of a property, or a non-repayable financial gift from a relative.

A non-traditional down payment must be arm’s length and not tied to the purchase and sale of the property, either directly or indirectly such as unsecured personal loans or unsecured lines of credit. Non-traditional down payments are available for 1–2 units, with 90.01% to 95% LTV, with a recommended minimum credit score of 650.

Creditworthiness

At least one borrower (or guarantor) must have a minimum credit score of 600. In certain circumstances, a higher recommended minimum credit score may be required. CMHC may consider alternative methods of establishing creditworthiness for borrowers without a credit history.

Debt service guidelines

The standard threshold is GDS 35% / TDS 42%. The maximum threshold is GDS 39% / TDS 44% (recommended minimum credit score of 680). CMHC considers the strength of the overall mortgage loan insurance application including the recommended minimum credit scores.

Interest rates

The GDS and TDS ratios must be calculated using an interest rate which is the greater of the contract interest rate or the Bank of Canada’s 5-year conventional mortgage interest rate.

Advancing options

Single advances include improvement costs less than or equal to 10% of the as-improved value.

Progress advances include new construction financing or improvement costs greater than 10% of the as-improved value. With Full Service, CMHC validates up to 4 consecutive advances at no cost. For Basic Service, the Lender validates advances without pre-approval from CMHC.

Non-permanent residents (homeowner loans only)

Non-permanent residents must be legally authorized to work in Canada (i.e. a work permit). Mortgage loan insurance is only available for non-permanent residents for homeowner loans for 1 unit, up to 90% LTV, with a down payment from traditional sources.

-CMHC

Calgary Real Estate News

Real Estate Market Update

Real Estate Market Update | March 2018 

What a difference a year can make. Year-over-year we are seeing significant changes throughout real estate markets across Canada. In each of the four major markets I’ve reviewed, Sales have dropped and Active Listings are on the rise, which means Beauty Contests and Price Wars will dominate the marketplace. 

Year-over-year, Vancouver is -30% in Sales, Edmonton -12%, Calgary -27% and Toronto nearly -40%. These are noteworthy changes and deserve some evaluation but I don’t think the sky is falling. Markets change but we as professionals need to be able to change with them.

Calgary, AB

Comparing March 2018 to March 2017, sales are down just over 27% and inventory is up almost 25%.  This means as of March 2018, Calgarians are working with roughly 4.6 months of inventory.  There’s no doubt you are in a shrinking market which means there are fewer sales happening for the same amount of people.

–Richard Robbins

Calgary Real Estate News

Housing Market Inventory on the Rise

As expected, slow sales this quarter have persisted through March in the City of Calgary. This is not a surprise, after stronger growth in sales at the end of last year following the announced changes to the lending market.

First quarter sales totaled 3,423 units, nearly 18 per cent below last year’s levels and 24 per cent below long-term averages. Easing sales and modest gains in new listings caused inventories to rise and months of supply to remain above four months.

“Economic conditions are slowly improving, but it has not been enough to outpace the current impact of higher lending rates and more stringent conditions,” said CREB® chief economist Ann-Marie Lurie.

“We are entering the most active quarters in the housing market with more inventory, which could create some price fluctuations. However, the improving economy is expected to prevent overall prices from slipping by significant amounts.”

While prices trended down on a quarterly basis, they remained relatively unchanged over last year’s levels due to modest gains in the detached sector offsetting declines in the apartment sector.

The citywide benchmark price for detached product averaged $502,000 in the first quarter. This is slightly lower than the fourth quarter of last year, but comparable to levels recorded in the first quarter of last year. In March, the detached price reached $503,800, 3.6 per cent below pre-recession highs, but one per cent above the lows recorded during the recession.

“The market today is better than what we experienced at the peak of the recession,” said CREB® president Tom Westcott.

“You can find good value if you’re looking to buy a home, and you can also get good value if you’re selling. Being well-informed, in any economic condition, is the key, because there are differences in the market depending on what type of property it is and where it is located.”

Detached market inventories in the first quarter of 2017 were low compared to historical standards. This year, detached inventories have averaged 2,573 units over the first quarter, 10 per cent below first quarter averages recorded during 2015 and 2016.

Spring will have more inventory than last year, slowing progress on price recovery. However, the amount of price adjustment will vary depending on competing supply by location and product type.

-CREB

Calgary Real Estate News

What to know if you’re considering a mortgage from an alternative lender.

Samantha Brookes has been warning Canadians to take a close look at the clauses in their mortgage contracts for years, but her refrain has become a bit more prevalent in recent months.

Since the Office of the Superintendent of Financial Institutions’ mortgage stress test was implemented in January, the founder of the Mortgages of Canada brokerage has seen “a huge influx” of Canadians who fail to qualify for a bank mortgage turning to alternative lenders that range from risky loan sharks to larger, more conventional companies like Home Trust.

While alternative lenders can provide a lifeline for Canadians who have run out of other financing options, Brookes said they come with pitfalls for those who don’t bother looking at the fine print.

“You need to read those contracts,” she said. “(With an alternative lender), the interest rates are higher, the qualifying rate is higher than if you were going with a traditional bank and they are going to charge one per cent of the mortgage amount (as a lender’s fee) for closing, so that means your closing costs increase.”

Alternative lenders tend to offer less wiggle room on their terms, so Brookes said that means you should pay special attention to another dangerous term she’s seen slipped into mortgage contracts: the sale-only clause.

It’s less common, Brookes said, but if left in, it might mean the only way you can break your mortgage is by selling your home. She usually makes sure it’s nixed from her clients contracts immediately.

She also advises mortgage-seekers to research a potential lender’s reputation, which can easily be done online. Looking up some lenders will reveal their involvement in growing strings of court cases, she said.

“If they are constantly in court fighting with consumers for money, are you willing to put yourself at risk with that kind of person?” Brookes recommended asking yourself.

Still, she said alternative lenders “that don’t end up in court every two seconds” are out there and can offer a good mortgage, if you do your research.

Broker Ron Alphonso has seen what happens when you don’t look into your lender. He recently heard from a couple who borrowed $100,000 via a paralegal posing as a broker, who then convinced the couple to give the money back to him so he could invest it on their behalf. Instead of investing it, the paralegal disappeared to Sri Lanka with the funds, leaving the couple on the hook for the money and resulting in eviction from their home.

“They got very, very poor advice,” Alphonso said. “Apparently the person that arranged the mortgage was an agent and paralegal that has since been disbarred. If they had a lawyer working for them, at least the lawyer could have said (before they signed the mortgage) maybe this isn’t right.”

Alphonso recommends seeking advice from a broker, who he said should also be questioned about how tolerant a lender will be if you were to default on one of your payments.

Some lenders quickly force their clients into a power-of-sale or foreclosure, while others will find a way to work out an arrangement that will allow them to keep their home.

“If you are already in some kind of financial problem and you go to a lender that is not flexible, you make the situation worse,” Alphonso said. “If you miss one payment, (within) 15 days you can be in power-of-sale.”

When that happens, he often sees people refuse to leave their home and try to fight the power-of-sale or foreclosure. They take the matter to court and end up spending tens of thousands of dollars in legal fees that can eclipse any remaining equity they might have in their home.

If they lose their case, which Alphonso said happens often, they end up with a massive lawyer’s bill, no equity to cover it and no place to live.

That’s part of why he said those seeking financing should have an exit strategy to get out of any mortgages they sign with an alternative or private lender with a higher interest rate.

“Your goal should always be to get to a lower interest rate,” he said. “If they don’t go in with a true goal of how to get out of this private mortgage, there will be a problem down the road.”

Alphonso recommended looking for an open mortgage, where you can prepay any amount at any time without a compensation charge or a prepayment limit that you would often find in a closed mortgage.

Open mortgages come with higher interest rates, but give buyers the option to switch to a cheaper lender if something happens. However, switching does often come with penalties, he said.

Because some agents and brokers don’t give enough information or fully explain penalties and clauses, he said the best way to keep out of trouble when seeking a mortgage is to ask lots of questions and understand what you’re getting into before signing on the dotted line.

-TARA DESCHAMPS, Globe & Mail

Calgary Real Estate News

Mortgage renewals in 2018: Prepare for nasty rate surprises

The era of pleasant surprises for people renewing their mortgage is done.

Years of falling interest rates in the aftermath of the 2008-09 financial crisis taught a generation of home buyers that renewing a mortgage is a chance to reduce your payments. Now, we’re heading into the first wave of postcrisis renewals at higher mortgage rates.

If you bought your house five years ago and chose a mortgage with the ever-popular five-year term, rate hikes since last summer mean your payments are headed higher on renewal. Competitively discounted fixed five-year mortgage rates today run from 3.19 per cent to 3.59 per cent, depending on your particular home and mortgage details. Five years ago, a comparable rate was 2.74 per cent. The lowest five-year rate widely available in the past five years was 2.44 per cent in mid-2016, according to RateSpy.com.

David Larock of Integrated Mortgage Planners said he’s starting to hear from homeowners who are taking in this shift in rates. “I get e-mails from people once in a while to say, if you can get me my old rate of 2.49 per cent, I’d be happy to renew,” he said. “I have to break their hearts.”

Higher rates are just half the story. New mortgage-industry rules are complicating the process of taking your mortgage elsewhere if you don’t like the rate offered by your current lender. Vince Gaetano, a broker with MonsterMortgage.ca, said a lot of people seem to think the new rules applied only to first-time buyers. “Now, they’re coming up to their renewals and they’re saying, I had no idea this impacted me. I would have planned for this last year.”

The new rules require buyers with a down payment of 20 per cent or more to undergo a stress test that ensures they could afford their mortgage payments at the greater of the Bank of Canada’s five-year benchmark rate (now 5.14 per cent) or the actual rate being offered plus two percentage points. People with down payments below 20 per cent already faced a stress test, but it was set at the five-year Bank of Canada rate and thus slightly less stringent.

For existing homeowners, the stress tests are a non-factor as long as they’re renewing their mortgage with their current lender. If they want to move the mortgage to a different lender, a stress test must be applied. Unless you can pass the stress test, you’re likely stuck with your current lender. Mr. Gaetano expects lenders, notably the banks, to use the new rules as an opportunity to become less competitive in the renewal rates offered clients who appear to be less creditworthy. Better rates may be out there, but these clients won’t be able to get them.

A recent column looked at how people refinancing their mortgages to add other debts must also pass the stress test now. Refinancing is a popular tactic used by people who are getting overwhelmed by their debts. How popular? Mr. Gaetano said about 80 per cent of his clients who are up for their first mortgage renewal have in the past refinanced as opposed to simply renewing.

The biggest rate shocks will be felt by people who thought they were being prudent borrowers by putting down 20 per cent or more and thus avoiding the cost of mortgage-default insurance. This insurance makes a mortgage more attractive to lenders because the equity built up in the house means they won’t lose money if borrowers can’t repay what they owe.

That competitive 3.19-per-cent, five-year fixed rate mentioned earlier is for people who started with a so-called high-ratio mortgage, where the down payment is less than 20 per cent, and/or for those who have a mortgage that is less than 65 per cent of the current value of their home. Also, the purchase price had to be below $1-million. The best rate applies here because the mortgage is insured against default.

Expect rates in the area of 3.39 to 3.59 per cent if you’re renewing a mortgage of between 65 per cent and 80 per cent of the home’s current value (for example, a couple that put down 20 per cent at the time of purchase several years ago) and/or had an original purchase price of $1-million and higher. The same applies to people who are refinancing when they renew.

If years of declining rates have reduced the motivation for homeowners to shop around for a mortgage deal, Mr. Larock expects that to change this spring. “If their costs are going up, a lot of people are going to be more inclined to see what else is out there.”

-Rob Carrick, Globe & Mail

Calgary Real Estate News

Home sales fall nearly 17% in February from a year ago: CREA

Canada’s national average home price was down five per cent and sales volume was down 16.9 per cent in February compared with a year ago, evidence that many buyers raced to purchase before new mortgage rules came into effect.

There was also a 6.5 per cent decline in transactions between January and February, the second month-over-month decline and the lowest reading in nearly five years, the Canadian Real Estate Association reported Thursday.

CREA’s latest monthly statistics show that home sales were down in February in almost three quarters of all local housing markets tracked by the national association.

“The drop off in sales activity following the record-breaking peak late last year confirms that many homebuyers moved purchase decisions forward late last year before tighter mortgage rules took effect in January,” said Gregory Klump, CREA’s chief economist in a statement Thursday.

The number of homes sold nationally in December hit a record high, ahead of a new stress test for uninsured mortgages that requires potential buyers to show they can service their mortgage payments if rates increase.

The federal banking regulator’s tougher rules, which took effect Jan. 1, now require a stress test to be applied even to borrowers with more than 20 per cent down payment.

To qualify for federally regulated mortgages, borrowers must be able to afford interest rates that are two percentage points above the contracted rate or the Bank of Canada’s five-year benchmark rate, whichever is higher.

The stricter residential mortgage lending regulations introduced by the Office of the Superintendent of Financial Institutions were aimed at reducing risk in the market amid high housing prices.

Homebuying activity has also been dampened by the Bank of Canada’s move in January to hike interest rates to 1.25 per cent. The quarter-point increase was the central bank’s third since last summer, after hikes in July and September. In January, Canadian home sales fell by 14.5 per cent from the previous month, according to CREA’s figures.

The national average house price for homes sold in February 2018 was just over $494,000, down five per cent from a year earlier. But excluding Toronto and Vancouver, the country’s most active and most expensive markets, the national average price was just under $382,000, up 3.3 per cent from $369,728 a year ago.

The number of newly listed homes in February increased by 8.1 per cent, following a plunge of more than 20 per cent in the month prior. However, new listings across the country in February were still 6.4 per cent below the 10-year monthly average and 14.6 per cent below the peak reached in December 2017. New home listings in February were also below the levels recorded every month last year except January 2017.

-Globe & Mail

Calgary Real Estate News

What Does Donald Trump Mean For Canada’s Housing Market?

U.S. President Donald Trump sent shockwaves through Canada’s economy this past week, first promising punishing tariffs on steel and aluminum imports, then at the last minute exempting Canada from those tariffs, at least temporarily.

It’s becoming painfully clear that Trump’s policies (or pronouncements, or whims, or whatever they are) have the potential to upend Canada’s economy, and with it, the lives of Canadians. So maybe it’s time for this real estate-obsessed nation of ours to pose a question that until recently seemed too obscure — or maybe just too weird — to ask: What does Donald Trump mean for Canada’s housing market?

It may seem counter-intuitive, but Trump’s aggressive protectionism might actually work to support house prices.

The Bank of Canada this week decided against yet another interest rate hike, and among its reasons was this statement: “Trade policy developments are an important and growing source of uncertainty for the global and Canadian outlooks.”

Analysts took that to mean the BoC is worried that Trump’s protectionist measures, such as the steel and aluminum tariffs or potential withdrawal from NAFTA, could harm Canada’s economy. And if Trump manages to scare the BoC into a more dovish outlook on the economy, it will mean fewer interest rate hikes in the months to come.

That might actually be good news for Canada’s heavily indebted mortgage borrowers, who are under increasing pressure these days. We’ve seen the BoC hike interest rates three times since last summer, and major mortgage lenders have followed suit. Meanwhile, new mortgage rules are forcing some homebuyers to scale back their ambitions.

The result is a slowing housing market, both nationally and in the two super-pricey markets of Toronto and Vancouver. And the Bank of Canada might now be getting worried about the impact of that slower housing market on Canada’s economy.

“Notably, household credit growth has decelerated for three consecutive months,” the Bank noted in its decision Wednesday.

Canada has been growing increasingly reliant on its housing market for economic growth in recent years, so a slowdown could take a real bite out of employment, and that, in turn, could mean a broader economic downturn.

The irony of it is that, if Trump were to abandon his protectionist measures and the BoC were to assume a more rosy outlook, it would likely mean more rate hikes ahead, and more downward pressure on housing.

All of which is not to say we should be hoping for Trump to slap Canada with massive tariffs or cancel NAFTA; a move like that would cause all sorts of economic damage of its own, regardless of housing. But if Trump pulls the trigger on his protectionist agenda, the Bank of Canada may well respond by freezing interest rates, and some analysts say it may even reverse course and start dropping them.

So a trade war with Trump’s America, while likely to be ugly, will at least help keep those property values from crashing. That may be the closest thing to a silver lining in this whole mess.

– Daniel Tencer  Senior Business Editor, HuffPost Canada