What CUSMA Uncertainty Really Means for Canadian Real Estate

There’s been a lot of noise recently around the Canada–U.S.–Mexico Agreement (CUSMA) and whether the U.S. could withdraw or force a renegotiation. Much of this discussion has been well summarized by Dr. Sherry Cooper (our Chief Economist) and I wanted to share how this translates into real-world implications for Canadian real estate, lending, and development.

The key takeaway:

 The biggest risk right now isn’t tariffs — it’s uncertainty.

Even the possibility of a U.S. exit from CUSMA increases caution across capital markets. We see this show up first not in prices, but in behaviour:

• More conservative underwriting

• Longer diligence timelines

• Higher equity requirements

• Capital becoming more selective, especially for development and construction

This helps explain why many markets feel like they’re in a holding pattern, rather than moving sharply up or down.

That said, this is not a systemic housing or real estate crisis.

Canada’s long-term fundamentals remain intact:

• Chronic housing undersupply

• Strong population growth

• Continued demand for rental and multifamily housing

• Ongoing strength in CMHC-backed and institutional capital

In fact, periods of macro uncertainty often reinforce demand for:

• Purpose-built rental

• Well-capitalized development projects

• Conservative capital stacks with clear exit strategies

On interest rates, Dr. Cooper makes an important point:
The largest move is likely behind us. While fixed rates may remain volatile due to bond market uncertainty, policy rates are expected to stay relatively stable. For borrowers, this puts a premium on planning, structure, and flexibility, not speculation. Source:articles

Bottom line:
CUSMA uncertainty is a confidence and capital-allocation issue, not a real estate collapse story. Markets are slowing to assess risk — not breaking. In environments like this, the projects that move forward are the ones with strong fundamentals, experienced partners, and thoughtful financing strategies.

I’ve linked Dr. Sherry Cooper’s full commentary below for anyone who wants to dive deeper.

If you’d like to discuss how this environment impacts your plans — residential, commercial, or development — I’m always happy to connect.