The new world order

The market gazed upon Tariff Man Thursday morning, and had a cow. Today it became a herd. Losses abound (unless you own bonds, which you should – we told ya). Global recession is now  more likely. The odds for a US downturn just rose from 40% to 60%. China has hit back to America. Us, too. The war is on. Nobody wins.

Meanwhile behold the latest maple job stats. More ugly. Over 32,600 net losses last month. A whopping 62,000 full-time positions were erased. The worst in three years. The unemployment rate goes up. “Details were even a bit weaker,” says BMO chief econ Doug Porter, “for the most part, signalling that the widespread decline in business (and consumer) sentiment in the past two months played out in real decisions last month.”

Yup. It’s an epic funk. Looks like equity market losses will continue for a while. Some individual stocks will be hammered into dust. The big headlines in coming months will be about layoffs. The Bank of Canada will have little recourse but to drop rates a few times, while rekindled inflation in the States may have the Fed holding or raising theirs. The gap between the countries will grow. The loonie fall. Trips to the US? Fuhgeddaboudit.

Confidence is melting away, because the people leading the world don’t seem to deserve any. Last month’s real estate stats support that as sales fall, listings rise and prices wobble.

But wait. How do we explain what a veteran agent in tony mid-town Toronto just told me?

A detached (it hasn’t been on the market in 60 years, not heritage), was listed in Riverdale. A 50 x 180 foot lot.  Needs a renovation, possibly a total gut, very unique layout. Listed at $3,988 million.

I have a client looking in that pocket and mentioned it to her.  She didn’t offer on that one, however it sold today with 7 Offers for $4,650,000.

I have actually been noticing much more movement on that price range as opposed to the just under $2 million range.  Makes you wonder. Are they seizing the moment? Do wealthy investors feel things are about to change and demand will increase as will prices?

Of course very wealthy people – those who can pay 4.6 million, or $700,000 over asking, for a house you can’t yet live in – are not like everybody else. They worry about long-term asset class values and net worth preservation, not how to finance next week’s groceries or the coming mortgage payment.

So in a world being pushed into a fundamental restructuring, where Canadian dollars are destined to lose value, equities are emotional and quixotic and one rogue president’s executive orders can slash the viability of whole industries, the rich often migrate to safety. For some of them, it’s real estate – in desired urban hoods where prices never crash for properties that cannot be duplicated.

Or maybe they’re just crazy.

Anyway, the rest of the housing market is feeling the same angst that’s keeping UAW workers up at night. If the orange guy does in fact cause a recession to grip North America (the odds are high he will), the most significant property correction since Covid may be upon us.

The stats from March are harbingers.

“Given the current trade uncertainty and the upcoming federal election, many households are likely taking a wait-and-see approach to home buying,” says the GTA real estate cartel. “If trade issues are solved or public policy choices help mitigate the impact of tariffs, home sales will likely increase. Home buyers need to feel their employment situation is solid before committing to monthly mortgage payments over the long term.”

Well, that’s not coming any time soon. Sales last month fell 23% while new listings jumped 28%. The MLS Frankenumber has taken a significant drop of almost 4% year/year with the average selling price of just over $1 million down 2.5%. That means we’re nearing a 20% bear market from the peak of 2022.

In Vancouver, same sentiment.

“If we can set aside the political and economic uncertainty tied to the new U.S. administration for a moment,” say the realtors, “buyers in Metro Vancouver haven’t seen market conditions this favourable in years. Prices have eased from recent highs, mortgage rates are among the lowest we’ve seen in years, and there are more active listings on the MLS® than we’ve seen in almost a decade. Sellers appear ready to engage — but so far, buyers have not shown up in the numbers we typically see at this time of year.”

Nope. Sales have fallen, new listings jumped (29%) and total inventory available is up almost 40%. Last month only one in ten detached homes for sale found a buyer. Average property prices are down about a point to $1.1 million.

In Calgary, “Ongoing economic uncertainty, driven by tariff threats, has weighed on consumer confidence and impacted housing activity in March,” says the industry. “Sales slowed across all property types, with the steepest declines seen in higher-density segments.”

“It is not a surprise to see a pullback in sales given the uncertainty,” says chief economist Ann-Marie Lurie, who also reminds reluctant buyers that prices are flatlining, mortgage rates falling and choice expanding. But, alas, no FOMO.

Well, all real estate is local. Victoria and Montreal are doing okay. Halifax not so much. But it’s safe to say this tempest has just started. Stay moored.

About the picture: “Frederick knows the best tactic for survival,” says Keith, “is to rest easy and ignore all the noise. Life is good!”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/04/04/the-new-world-order/