There’s a temptation to believe the Trump administration is playing “4D chess” and we simply can’t comprehend the level of intelligence behind these moves. I’m not convinced of that.
The Two Minute Market Update is intended to keep readers apprised of what’s going on in local real estate markets and in the global financial markets that affect real estate via inflation, interest rates, capital flows and public policy. It is best suited for those not able to keep up with all the news every day, but still wanting to be informed.
Two Minute Market Update, April 23rd, 2025
North Vancouver listings and sales numbers continue to move in opposite directions, pushing the market closer to “buyer’s market” territory. Unless some significant sales figures register in the final weeks of April, the board will be releasing statistics showing broad weakness in all Greater Vancouver markets for April. Prices are not by any means “crashing”, but buyers can expect to be in the driver’s seat in negotiations, while sellers should be pricing properties attractively to generate interest. Overall economic weakness, job insecurity, lower immigration and investor sentiment are all contributing to the conditions, despite interest rates that are much lower than in the past two years. Policy uncertainty is contributing to all the above factors, and reversals of this can be swift. The market may change quickly if there is any material resolution in either the tariff situation, federal government policy, or both. Anecdotally, there is still a lot of buyer interest in the market on properties priced reasonably.
The Canadian Central Bank held rates steady in a decision that could have gone either way. The US Fed is not expected to make an adjustment in their meeting two weeks from now. Both banks are slightly favoured to make reductions in their June meetings as of this writing. The prospect of “stagflationary” conditions (weak growth coupled with high inflation) due to trade disruptions are what seems to be keeping them on the sidelines. The possibility of inflation expectations becoming “unanchored” is the primary concern. On the growth and supply side, we’re starting to see indications of Covid-like scenarios, such as drastically reduced global shipping. If these conditions persist for even a few more weeks, they will take many months to resolve, pushing prices for many things higher in the meantime. The need to become less dependent on global supply chains, China in particular, is very real, but it won’t be done without an enormous cost. There’s a temptation to believe the Trump administration is playing “4D chess” and we simply can’t comprehend the level of intelligence behind these moves. I’m not convinced of that.
Bond yields are responding to the collapsing stock market, economic indicators, and sentiment by mostly going higher. This behaviour is highly uncharacteristic, as weakening economic conditions are usually associated with lower rates. As the US administration becomes increasingly unpredictable, market participants seem to be reducing their exposure to bonds, sending rates higher. It’s role as a traditional ‘flight to safety’ is in some jeopardy and there will need to be some reassurance through stable policy moves. Compromising the central bank’s independence wouldn’t be one of those.
The US Dollar is also taking it on the chin, perhaps by design, as other currencies (including the Canadian Dollar) are up sharply. This makes US exports more attractive, of course. But if the underlying cause of it is that foreigners are losing confidence in the US as a “safe haven” market, that bodes ill for US stocks, bonds and the global economy. Speaking of stocks, they have not yet broken out of the firm downtrend that was kicked off in February. Canadian stocks are faring far better, perhaps the start of a trend, as investors reallocate portfolios.
Bitcoin is recovering nicely from its multi-month consolidation and currently pressing up against a resistance level. Gold continues to make new all-time highs as investors look for neutral assets as a way to hedge against traditional asset selloffs. Oil collapsed along with the rest of economy-sensitive commodities, but has rallied to test the range lows of the past 4 years ($65-85). We’re now seeing lower prices at the pump (partly due to the oil price, partly due to the consumer carbon tax) and that will feed into inflation numbers, helping to counteract the tariff-related increases.
Matthew Stiles
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Disclaimer: The information provided in this column is for general informational purposes only and does not constitute financial, investment, or other professional advice. While I strive to provide accurate and up-to-date information, I make no warranties or representations as to its accuracy, completeness, or reliability. Any actions taken based on this information are at your own risk. Always consult with a qualified financial advisor before making any investment decisions.