So… we’ll have to depend on the global economy to make up for the negative impact that a slowing Canadian real estate market will have on our economy?
Where are they hiding? They weren’t bashful about sharing their opinion when they were telling the Government to cool down the real estate sector. The real estate industry was the apple of every headline seeking expert’s eye. Government must act now…our economy is at risk…for the love of all things holy please save mankind from the evils of real estate. Funny watching the outcome – the government acted, the market dropped by 15 per cent and now those who demanded government action are now all of sudden too busy to comment.
There was a good article written by Michael Babad in the Globe yesterday titled “Careful What You Wish For”. The article refers to a new report from Avery Shenfeld, Chief Economist for CIBC. I won’t regurgitate the facts but the gist of the article is that slowing down the real estate sector could end up having a far reaching impact on the Canadian economy. Pleads from the minority, like CAAMP, cautioning the government not to over reach for fear of exactly what CIBC is now saying maybe should have been heeded. Here’s a quote I found interesting from CIBC’s report, “In 2013 an economic acceleration looks unlikely absent a new source of growth to fill in housing’s gap. That makes it even more urgent that the global economy is healthier come 2014, when the full bite of a housing slump on domestic activity will be felt. Until that’s a sure bet, policy makers will be cautious about pouring more cold water on the housing sector through further changes in mortgage insurance or higher interest rates.” So we’ll have to depend on the global economy to make up for the negative impact that a slowing Canadian real estate market will have on our economy? But we should all take solace in the fact that Shenfeld doesn’t believe the government will do anything to slow down the market further. I wonder what the magic number is? A 15 per cent drop is acceptable but 20 per cent or greater is unacceptable?
Seeing how we’re going to have to depend on the global economy to make up for the slowing real estate market we had all better keep on eye what’s happening in other parts of the world. Not sure if we should feel warm and fuzzy depending on Greece, Italy, Spain, China and the U.S. The Fed’s were in a tough spot and there’s no way they could predict, with one hundred per cent accuracy, the exact level of the slowdown. But in less than three months of the most recent changes to the mortgage rules there are signs they may have over reached; if that proves true there could be repercussions for the Fed’s, like contributing to Justin Trudeau mania.
Related Posts:
BOC Leaves Target Rate “As Is”
Canada Housing: Correction vs. Bust – Let the Finger Pointing begin
Bank of Canada still locked with the US Fed?
Real Estate & Mortgage Industry: The Margin Battle
Until next time,
Cheers.
B.Hale @Twitter ID Website