In a major international development, former U.S. President Donald Trump recently signed a $142 billion arms and technology deal with Saudi Arabia, including military defense systems, energy projects, and AI partnerships. At first glance, this may appear unrelated to the Canadian economy—but in an increasingly globalized world, geopolitical shifts can have ripple effects, even on the Canadian housing market.
Let’s explore how this monumental deal may affect real estate trends, interest rates, investor sentiment, and affordability across Canada.
🛡️ What Is the Trump–Saudi Arms Deal?
Announced in May 2025, the U.S.–Saudi agreement includes:
- A $142 billion arms package featuring Patriot missiles, THAAD systems, and military aircraft
- AI and tech investments involving Nvidia and other U.S. firms
- Major energy and infrastructure projects
- Talks encouraging normalization between Saudi Arabia and Israel
- A push to lift sanctions on Syria and restore regional trade
This deal marks a significant geopolitical shift with broader implications than defense alone—it’s about regional control, economic influence, and global investment flows.
🌍 Why Global Events Impact Canadian Real Estate
Canada’s real estate market doesn’t exist in a vacuum. Global events, especially those tied to U.S. policy, often influence:
- Investor behavior
- Currency values
- Interest rates
- Construction costs
Let’s break it down.
💸 1. Investor Sentiment & Foreign Capital
When the world becomes more unpredictable, international investors often look for stable real estate markets. Canadian cities like Calgary, Toronto, and Vancouver continue to be viewed as low-risk investment hubs.
- This arms deal could destabilize parts of the Middle East, encouraging investors to redirect their capital.
- That capital may land in Canadian real estate, potentially increasing property demand and driving up home prices—especially in the luxury and pre-construction markets.
💱 2. Currency Volatility and Inflation
Shifts in U.S. foreign policy and massive defense spending could strengthen the U.S. dollar, causing the Canadian dollar to weaken.
- A weaker CAD can increase import prices, adding to inflationary pressure.
- The Bank of Canada may respond cautiously with interest rate decisions.
- For buyers, this could mean higher mortgage rates or reduced borrowing power over time.
🏠 3. Domestic Trends in the Canadian Housing Market
According to the Canada Mortgage and Housing Corporation (CMHC) and recent projections:
- Home prices are expected to decline modestly in Ontario and B.C.
- Provinces like Alberta may see slight growth due to strong resource sectors
- Affordability remains a top concern, with many first-time buyers still priced out
- Anticipated interest rate cuts in 2025 may not fully offset other cost pressures
While Canada’s housing market is cooling, any external shock—such as changes to global oil prices or supply chains—can disrupt this balance.
🧱 4. Construction Costs & Trade Pressures
Trump’s renewed focus on domestic production could increase trade friction between the U.S. and its allies, including Canada. If tariffs are reintroduced on goods like:
- Lumber
- Steel
- Aluminum
…it could inflate construction costs, slow new housing developments, and tighten supply. For Canadian buyers, that means fewer listings and higher competition.
🔍 Will This Deal Directly Impact Canada?
Not directly—but here’s what to watch:
- Oil Prices: If regional tensions escalate, oil prices could rise, strengthening Alberta’s economy but increasing overall inflation.
- Middle Eastern Capital: Investors from the Gulf states may seek diversification in Western real estate markets, including Canada.
- Global Capital Flow: Uncertainty often means flight to safety—and Canadian property is a top destination.
📊 How Buyers and Sellers Should Respond
✅ Buyers
- Lock in rates if you’re planning to purchase soon
- Monitor inflation trends and how they affect mortgage qualification
✅ Sellers
- Price strategically; markets may fluctuate with changing investor behavior
- Take advantage of increased international interest in Canadian real estate
✅ Investors
- Diversify your holdings to balance risk
- Watch construction trends and inventory levels closely in your target cities
🔗 Final Thoughts
While Trump’s arms deal with Saudi Arabia may not hit Canadian real estate headlines directly, it’s another reminder of how interconnected our housing market is with global politics. If you’re buying, selling, or investing in 2025, staying informed and understanding the bigger picture will help you make smarter real estate decisions.
📩 Need help navigating the market in Calgary?
Let’s talk strategy — reach out via MyRealtorGill.com or call 403-370-7695 for a consultation.
