To The Pointwith Boris Bozic
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1 Comments Housing Prices: What is being said?

Article written by Boris Bozic on the 16 Jan 2013 in Mortgage

It’s not necessarily what you say but when you say it.  This came to mind to when reading an article in the Globe and Mail this morning.  The headline read,Jim Flaherty on home sales dive: I don’t mind prices coming down a bit, too”.  Was this remark simply off the cuff?  Or was it a comment made by someone who has decided it is time to pursue other career paths, therefore, being candid will have no political ramifications?  I got to thinking about that because the other half of the economic dynamic duo has already decided to bolt.  Mark Carney (not sure who’s Batman or Robin in this working relationship) has been making bold and provocative statements for the past 24 months.  Was that a result of Carney becoming enamored with his own press clippings or has he known for some time now that he would be perusing greener and more lucrative pastures?  Clearly there’s only one person who can answer that but it does leave one wondering if the level of candidness was a result of an impending departure.

So what to make of Flaherty’s statement that he wouldn’t mind if home prices come down a bit?  Now there’s a future campaign slogan.  Out on the campaign trail, pumping flesh, kissing babies and reminding voters that’s okay if the equity in your home has been eroded.  Logic and experience tells us that politicians have an outside and inside voice.  Outside voice: “NO NEW TAXES”.  Inside voice: “VOTE FOR ME MY LITTLE LEMMINGS”.  Flaherty is not a nephrite when it comes to making public comments.  He’s been doing this for too long to know what will and will not stick to him.  Politically, making a comment like “I don’t mind prices coming down” doesn’t make a lot a sense; so, is this frankness a sign that he may be moving on?  If it is, who could blame him?  He’s done an admirable job during uncertain times.  He’s been in this role for some time now, and navigating the Canadian economy since the economic crisis couldn’t have been a lot of fun.  The daily pressure and issues he faces would leave most curdled up in the fetal position, sucking their thumbs and calling for their mommies.  Okay, maybe that’s just me.  Jim Flaherty has done a great service for this country, and if he’s decided that now is the time for him to cash it in, we should all volunteer to give him a ride to the bank.

As for the most recent housing data in the Globe article, “Alex, I’ll take No #%&@ for $200, please”.  The net result is exactly what the government wanted.  The good news – the number of listings are down.  There’s balance between supply and demand, and we have low interest rates and solid employment numbers.  There’s a new norm we will all have to adapt too, and nothing suggests Armageddon is on the way.  Now if we could only get public officials to lower the decibel levels, a bit, we’ll be just fine, thank you.

Until next time,



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Hello Boris

Stable supply and demand in a free market (i guess a limited free market in Canada) or in capitalism is supposed to be dictated by the consumer not by shifts in the demand curve created by the government through changes in policy. By cutting large chunks out of the buyer market and making it hard for consumers to buy up good ol Jim has made the demand curve shift. It would appear to me that this has kept a over supplied condo market from correcting all by its self.

Based on what I am seeing in my day to day business it appears that some clients that would like to sell can’t right now because of the drop in values making the equity achieved out of their properties to small or in the some condo clients cases a loss. I would guess that like in most political cases when elected officials look back and realize that they have made such a mess of things that it can be fixed they tend to move on.

Side note over a year ago or more on Lang and O’leary there was a comment made that Carney was being looked at for the bank of England and that he would most likely be leaving for that position.

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