The ripple effects of the ongoing tariff tensions between Canada and the United States are being felt across multiple sectors — and real estate is no exception. For homebuyers in Toronto, one of the most pressing impacts is on the cost of construction, making the option to build a new home significantly more expensive than in previous years.
If you're deciding between buying an existing home or building from the ground up, here’s why now might be the time to focus on resale properties:
1. Tariffs Are Driving Up Construction Costs
Recent tariffs on key materials such as lumber, steel, aluminum, and other building supplies have sent construction costs soaring. With the U.S. imposing a 25% tariff on Canadian imports and Canada responding in kind, the price of materials has become volatile and inflated. Builders are already adjusting their pricing to reflect these increases — and those costs are ultimately passed on to buyers.
This means that what you could have built for $1 million last year might now cost closer to $1.2 or $1.3 million — and that's before factoring in labor shortages and permit delays.
2. Predictable Pricing and Fewer Surprises
When you purchase an existing home, you know what you’re getting — and what you’re paying. With new construction, fluctuating material costs and potential delays can cause budgets to spiral and timelines to extend. In today’s uncertain economic climate, that kind of unpredictability can be stressful and financially risky.
Existing homes offer more stable pricing and immediate availability, which allows buyers to lock in a mortgage and move forward without the worry of mid-project cost escalations.
3. Better Location Options and Mature Neighborhoods
Many of Toronto’s most desirable neighborhoods are already built out, and opportunities to construct a new home in these areas are limited — and expensive. Buying an existing home gives you access to established communities, mature trees, nearby schools, transit, and amenities that new developments on the outskirts may not offer for years.
4. Renovate, Don’t Rebuild
If your dream is a custom home, consider buying an existing property and renovating. Even with renovation costs, you're likely to save money compared to building new in today’s high-tariff environment. Plus, you’ll avoid the red tape, zoning restrictions, and supply chain bottlenecks that come with new construction.
5. Faster Move-In and Market Timing
With interest rates and inflation still a concern, timing matters. Buying an existing home allows you to act quickly — locking in a rate, closing in a predictable timeframe, and moving in without waiting months (or years) for a build to complete. In a market like Toronto, speed can be a major advantage.
Final Thought
While building a new home once offered more value and customization, today’s tariff-driven landscape has shifted the equation. With construction costs at a high and market volatility on the rise, purchasing an existing home provides a smarter, more financially secure path — especially for buyers looking for stability, value, and peace of mind.
If you're considering your next move in Toronto’s evolving market, now might be the time to explore the wealth of opportunity in the resale home segment.
