There’s been a tsunami of economic data released over the last two weeks; couple that with the new Federal Budget, as well as musings from the Bank of Canada, there’s a lot to chew on.  I’m always on the lookout for the “nugget” as it relates to the mortgage industry.  Be it data or something said. 

The Bank of Canada is still predicting that if there is a price correction it will be a “soft landing”, but with an interesting caveat.  According to the Bank of Canada, “The adverse impact of the oil price shock in Alberta, along with robust price growth in Toronto and Vancouver suggests a correction in these markets” – nothing really new here.  I think we all know there are two very distinct real estate markets, Toronto and Vancouver on one hand, and the rest of Canada on the other. As for Alberta, once again nothing new. But what I found interesting was that the Bank of Canada suggested that the Toronto and Vancouver marketplace may have to be dealt with separately from a regulatory or pricing standpoint if home values continually rise. Well, this is different. For now it appears to be a warning or simply a heads up to the two respective market places, but it would be naive to think this is just bluster. The Bank of Canada is concerned that a significant correction in home prices in Vancouver and Toronto could spill over to other regions. For all my friends and colleagues in Vancouver, you’re used to this type of chatter. For decades you’ve been hearing, “Here it comes, get ready to create tents cities in Stanley Park because the market is going to crash and you’ll be out of your homes”. I get it, you roll your eyes when you hear this. But for us in Toronto it’s fairly new.  Toronto has been this countries piñata for the last decade so leading in any category is fresh. So you’ll have to excuse us here in Toronto if we become skittish by threats. It’s only from of our lack of experience dealing with predictions of the apocalypse.

Helping to ease some of our angst in Toronto, and Ontario, was the most recent federal budget.  Yes, Ontario is the pretty girl, and federal Tories want to take us to the prom.  The most recent federal budget was skewed to help the manufacturing sector in this country.  Trouble in the resource sector? No problem, the federal Tories looked to Ontario and pulled a Joey Tribbiani from Friends and just said “how you doin?”  Worry not Alberta. The Tories are not saying “goodbye”. They’re simply saying “we’ll see you again” – like right after the next election.

Until next time,

Cheers.