I read a fascinating article over the weekend in the New York TImes over the weekend titled “Building Homes Under the Trump Agenda.” This is not intended to be a political blog entry, just a breakdown on how new home construction will change under the tariffs and counter-tariffs.

The article reviewed a home being built in Phoenix and it offered a line by line breakdown of how the costs will change. The one major difference between Canada and the USA is that there is pressure south of the border to deal with illegal immigration which forms much of the trades involved in home construction.  Leaving that component out of the discussion, here are some of the new home components and how American tariffs will impact construction.

Concrete foundation: +18
Windows: +11
Roofing : +21
Insulation/Drywall: +20
Appliances: +11%

The home in the article was budgeted at $1.3 million to construct and with the increases (both labor and material) the costs increased by over $200,000 to $1.525 million dollars. If we removed the labor costs the increase in construction costs alone is around $172,000.  The question is “Yes but this refers to the USA. How will our counter-tariffs impact new home construction here in Canada?”

When you look at the vast amount of  components that go into a new home when it is being built, many of the products come from the USA. Some of the products imported from the United States are:

• Insulation 
• Drywall
• LVL Beams
• HVAC systems and hot water heaters
• Electrical components
• Plumbing fixtures.

Common brands such as Trane, Carrier and Goodman air conditioners, Square D electrical components and Moen, Delta and Kohler plumbing fixtures are all imported from the USA.

A quick search shows a Square D 200 amp electrical panel priced at $650 at Home Depot. If this product was part of the reciprocal tariffs of 25% the cost of the panel would jump to over $800. This increase would be passed on to the buyer of the new home. At this point many of the products found in new construction are not part of the reciprocal tariffs, however, as we move forward they may become part of the targeted strategy.

About a decade ago when municipalities started to increase the development charges they required when obtaining building permits many of the new home builders required the Buyer to pay the increased charges. (Toronto increased development charges by 993% from 2010 – 2024.) This caused a considerable amount of panic on closing day and with the uncertainty of tariffs being implemented on different construction materials it would stand to reason that a similar request would be made of the Buyers by the new home builders.

There is a way to avoid the uncertainty of increased costs in new construction – by purchasing a resale home. With a resale home you know exactly what you are getting and how much it will cost – to the penny. Also, when you buy a resale home, you are buying a Canadian product. It will have some American parts but you will be investing in the Canadian economy and your money stay local. 

Now more than ever, it just makes sense to purchase a resale property. 
If  you are interested in purchasing a home or in selling a property, I can be reached at lindsay@buyselllove.ca or 905-743-5555.

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