Tariffs are putting a damper on the real estate ambitions of some British Columbians, with a quarter of B.C. homebuyers saying tariffs have impacted their borrowing capacity, according to one survey.
Toronto-Dominion Bank (TSX:TD) said 24 per cent of current and prospective mortgagors are being squeezed by tariffs, with the national rate even higher at 31 per cent, according to a May survey commissioned by the bank and released Aug. 20.
“Where it’s playing a role for consumers is really the role of uncertainty, whether that be uncertainty around individuals’ own jobs, or whether that be uncertainty around everyday costs and budgeting, groceries, gas,” said Steve Ng, a Vancouver-based mobile mortgage specialist district manager with TD.
Tariffs are also contributing to unpredictability around home costs, whether that be purchasing a new home or building a new home, Ng said.
But concerns around tariffs may be gradually subsiding as bilateral negotiations continue and the tangible impacts of tariffs are better understood, he said. The Canadian government announced Aug. 22 that it is dropping some retaliatory tariffs on American products.
“We’re getting at that place now where consumers are slowly getting a little bit more confident about making a decision and being confident with that decision. Time has obviously been that one factor that has helped people perhaps be a little bit more comfortable,” he said.
Interest rates remain the primary focus of homebuyers, said the TD survey. Ninety-six per cent of B.C. respondents said a low mortgage rate is important, with 89 per cent considering it a top-three priority.
There is little agreement about the trajectory of rates. Respondents were divided, with a third (32 per cent) saying they believe interest rates will increase in the next year, 27 per cent saying they will decrease, and 31 per cent saying they will hold steady.
Ng said an observed shift from variable- to fixed-rate mortgages may be evidence that the real estate market is steadying.
“Now we’re seeing clients migrate more to the fixed-rate terms, the three-, four-, five-year terms. That, to us, really spells out that Canadians, especially British Columbians, are now feeling that things are stabilizing,” he said.
Besides rates, survey respondents identified renewal terms and conditions (97 per cent), the amortization period (87 per cent) and pre-payment options (86 per cent) as important during the mortgage process. Less important were cash-back offers and the flexibility to draw from or borrow against mortgages.
TD’s survey was conducted by The Harris Poll Canada on May 19 among 942 randomly selected Canadian homeowners and 223 randomly selected Canadians who plan to purchase a home in the next two years.
The results were weighted by age, gender, region and education to match the population, ensuring the sample was representative of the entire adult population of Canada. B.C.-specific findings were provided to BIV by request.
TD’s Ng said the survey was meant to inform his team of over 200 mobile mortgage specialists in B.C. by gauging the public’s concerns and real estate appetite.
With 29 per cent of B.C. respondents desiring easier access to trusted advice and 30 per cent lacking a strong understanding of mortgage affordability, Ng said this underscores the value of expert advice.
“I would say never hesitate to pick up the phone and to speak to somebody and get multiple opinions,” he said.
