Every four years, we hear the same old refrain from the United States: “If my candidate doesn’t win, I’m going to move to Canada.”
Of course, that seldom happens. As tempting as it might seem to the losing party, jumping overboard and swimming to safe land (Canada) isn’t realistic. But that doesn’t mean US politics can’t have a significant impact on Canadian markets, including the real estate market.
With the high stakes of the upcoming US presidential election on November 2nd, people are getting nervous about what they will be waking up to on the 3rd. If you’ve been holding off purchasing property or investing until after the election because of the uncertainty, here is some information you might want to consider:
What Happened in 2016?
One way you can predict how markets will react to upcoming elections is by taking a look back to prior elections.
When Donald Trump won the presidential election in 2016, it caused shockwaves around the world. No one expected him to win, as almost all of the polls only had him just within the margin of error. But win he did, and what was going to happen next was anyone’s guess. Democrats freaked out, and the old “moving to Canada” refrain appeared on Twitter, right on schedule.
But those millions of Democrats moving to Canada never materialized. The stock market took a hit the day after the election but jumped back up the following day. In the short-term, absolutely nothing changed. President Obama was still in power until January, the transition of power went reasonably smoothly, and the economy continued to hum along.
In fact, 2016 ended up being a record year in real estate in Canada, with the average price for housing reaching a new yearly high of $490,495. This winning streak continued for the next few years, only to be interrupted by the COVID-19 pandemic. And since then, the housing market in Canada has rebounded to a remarkable degree!
How 2020 is Different
With all that in mind, conditions are very different than they were four years ago. Political division in the United States has grown exponentially. COVID-19 badly hit their economy. And the current election seems to be one of the most chaotic and negative they’ve ever had.
In Canada, however, things have not changed quite as much (COVID-19 notwithstanding). The federal government has moved to a minority rather than a majority situation, but the same party is in power. While there have been some issues that divide us, it’s nothing like what is happening to our immediate south. COVID-19 is much more under control than it is in the US, and the housing market is still red hot across the country. So, those are all stabilizing factors moving forward into the end of 2020.
What Could Happen?
The stereotype is that if a Democrat wins the election, the stock market (and the real estate market with it) goes down. If a Republican wins, the markets go up. This perception isn’t historically accurate (markets tend to rise with Democrats over time), but you can expect buyers and sellers to predictably react as if it is at first.
If Biden wins, you can expect things to settle down considerably on the trade war front. USMCA, the successor to NAFTA, will be fully in effect, leading to more stable trade relations between the two countries. The lack of constantly-threatened tariffs could have a positive impact on economic sectors such as car manufacturing. In turn, the real estate market in regions with those industries could greatly benefit from this stability. On the other hand, Biden could also postpone the Keystone XL pipeline, which would be negative for other regions.
If Trump wins, you can expect more of the same that we’ve seen over the last four years. He believes in America first, and all of his policies consistently reflect this worldview. While the Canadian/US relationship will endure, we will likely be facing four more years of antagonism at our border.
Please keep in mind that these predictions have NOTHING to do with our personal politics. We are simply pulling from our experience to predict the likely scenarios that could happen in the next few months.
The Good News
Regardless of who wins the US election, the impact on Canadian real estate will likely be minimal. We have our own issues right now, including recovering from COVID-19. As more challenges mount throughout 2020 and beyond, savvy real estate investors will adapt, seeing opportunities and grabbing them, regardless of who is in the White House.
At Regalway Homes, we’ve been working in real estate investment through three US administrations (Bush, Obama, and Trump), two recessions, COVID-19, and much more. We use that experience to help our clients passively invest in real estate, both in times of prosperity and crisis. By doing this, we are offering them more stable and higher returns on their investments than they would get in the stock market.
With development projects spread throughout Canada, Regalway has an outstanding investment opportunity for everyone! Book a consultation with us today, and we can start helping you put your money to work in the real estate market!
Regalway Homes | info@regalwayhomes.com | 1 844-977-2679