Trade War Turbulence: How Canada-US Tensions Are Shaping Shuswap’s Real Estate Market in 2025

Historical commentary: This article reflects the trade-policy uncertainty and market discussion of March 2025. It should not be read as a current tariff, interest-rate or Shuswap market update. For a later local perspective, see the 2025 review and 2026 Salmon Arm outlook.

In early 2025, trade tensions between Canada and the United States created real uncertainty for households and businesses, including people considering a move in the Shuswap.

As tariffs rise and trade policies fluctuate, the ripple effects reach deep into our local economy, presenting a landscape where real estate dynamics are anything but stable. Buyers and sellers alike must navigate these turbulent waters, realizing that geopolitical tensions can directly influence housing prices, inventory levels, and buyer behavior.

In this article, we will explore how the Canada-US trade relationship is affecting Shuswap’s real estate market in 2025. By examining economic impacts, projected buyer trends, and the intricate balance between local communities and broader economic interests, we aim to provide some insight into the future of Shuswap’s housing market amid ongoing trade tensions.

The Current Canada-US Trade Relationship

The ongoing Canada-U.S. trade war has created an overwhelming amount uncertainty in the market. Business spending and hiring are affected, while consumer confidence is shaken. This environment forces many to reconsider their current financial strategies.

To mitigate the impact, the Bank of Canada recently cut its overnight lending rate to 2.75%. This decision aims to support economic activities amidst tariffs and trade tensions with the U.S. and such measures are crucial in maintaining stability within the Canadian economy.

The tariffs imposed on Canadian exports by the U.S. break the US-Mexico-Canada Agreement terms. They are seen as unjustified, straining the trade relationship further. In response, Canada proposed a $30 billion counter-measure to protect its economic interests.

Key Points:

• Overnight Rate cut to 2.75% by the Bank of Canada
• Canada’s $30 billion counter-response

Economic Impacts of Trade Tensions

Trade tensions between Canada and the U.S. have significant economic implications for British Columbia, particularly in industries reliant on cross-border commerce, such as forestry, manufacturing, and real estate. Tariffs on lumber and building materials increase construction costs, affecting housing affordability and new home development. Export disruptions weaken business confidence and job stability, which can slow consumer spending and dampen demand for home purchases. Meanwhile, currency fluctuations and economic uncertainty may drive investors toward safer assets, influencing real estate investment patterns. The recent Bank of Canada rate cut to 2.75% offers some relief by lowering borrowing costs, but whether this will counteract broader economic slowdowns remains uncertain.

Overview of Real Estate Market Activity

In February 2025, the British Columbia Real Estate Association (BCREA) noted a drop in residential unit sales.

“After several months of growing momentum, market activity was hampered in February by the uncertainty surrounding tariffs,” said BCREA Chief Economist Brendon Ogmundson. “Apprehension from prospective buyers will continue amidst this unfortunate trade war but may be somewhat tempered by lower interest rates on the horizon."

Provincially, only 4,947 units were sold, a 9.7% decrease from the prior year. The average residential price also fell to $964,349, a 2.4% decrease compared to 2024. The total sales dollar volume reached $4.8 billion, marking an 11.8% drop from a year before. The BC MLS® showed unit sales were 28% below the ten-year average for February, indicating a significant market slowdown.

In the entire Okanagan region, 475 units were sold marking a 3.1% decrease from last year. Average residential prices on the otherhand increased by 9.7% to $766,403.

The Shuswap real estate market showed positive trends in home prices and sales at the start of 2025. Combined year-to-date sales in Salmon Arm and Blind Bay increased by 17.2% to 34 units, while average prices experienced a slight decline of 1.68% to $719,156. However, February sales data, when examined independently, reveals the impact of the tariff threat. Although 19 units were sold, the average price dropped by whopping 15% compared to the previous year, reaching $674,078.

Table: February 2025 Real Estate Activity in the Shuswap Region

Single Family Residential - Salmon Arm & Blind Bay	February 2025 YTD	Change from Previous Year
Residential Unit Sales	34	17.2%
Average Residential Price	$719,156	1.68%
	February 2025
Average Residential Price	$674,078	-15%

This table summarizes the notable decline in real estate activity in regions of the Shuswap, influenced by ongoing trade tensions and uncertainty.

Buyer Behavior During Trade Turbulence

There's a clear shift in consumer confidence. However, the Bank of Canada cut interest rates to 2.75% which could ease some concerns. First time home buyers who have secure income, or those cash buyers out there will find themselves with the upper hand durning negotiations as we enter a buyers market in the months ahead.

Balancing Geopolitical Pressures and Provincial Needs

The U.S. Department of Commerce's decision to raise anti-dumping duties on Canadian softwood lumber to 20.07% is especially concerning. This move threatens the British Columbia (B.C.) forestry industry and increases costs for U.S. consumers. These tariffs pose a threat to the province's economy, which depends on lumber exports. Companies like Canfor are trying to adapt by focusing on domestic and offshore markets. The impact of such tariffs raises construction costs and affects housing affordability in the U.S. Canadian political leaders are navigating these complexities, Prime Minister Mark Carney has taken a firm stance, insisting on maintaining retaliatory tariffs until there is a display of respect for Canadian trade interests by the U.S.

Conclusion: Future Outlook for Shuswap’s Real Estate Market

Real estate markets often exhibit a lagged response to broader economic shifts, including trade tensions and policy changes. Factors such as interest rate adjustments, employment trends, and consumer confidence play significant roles. The sharp drop in February prices, I think it's fair to say Shuswap real estate market has already been impacted. However, the recent Bank of Canada benchmark rate cut to 2.75% is expected to influence borrowing costs and housing demand, which could drive demand over the coming months.

​The Shuswap region has demonstrated notable resilience amidst economic challenges, including trade tensions and policy shifts in the past. Through strategic planning, diversification, and adaptive economic policies, the Shuswap region will continue to exhibit resilience, and a robust economy even in the face of external uncertainties. The real estate market might face some challenging times but our strong and resilient communities will persist