In The Face of The Media
IN THE FACE OF THE MEDIA
According to recent broadcasts by the media, the Canadian public are told to brace themselves for a real estate crash, along with a general market crash. I believe that we hold too much stake in our identification with the good ole U S of A. Major Canadian banks, economists, mortgage brokers...just a small list of Canada’s professionals all state that our market is NOTHING like the USA’s. Here are a couple of examples of the differences:
1. Canadian financial institutions business and households have healthier balance sheets than those in the US.
2. Canadian banks have less exposure to the subprime-mortgage market than the US.
3. Canadian banks are less dependent on securitization for the financing and capital markets for their revenues.
Here is a quote that I pulled from Canadian Real Estate Forecast for 2008, which proves that I am NOT alone in seeing the” reality” of the market as opposed to the Media’s “opinion”:
“In sharp contrast to the weakening U.S. economy and deteriorating housing market, Canada’s economy and housing market continues to demonstrate staying power. Canadian mortgage products are markedly different from those offered in the U.S., and the sub-prime makes up a significantly smaller portion of the overall Canadian mortgage market. It is unlikely that the residential real estate industry in Canada will have to endure the kind of sharp correction underway south of the border.”
This morning I pulled an article off the Economic News website in regards to the Royal Bank of Canada. In this article, it states that they are actually benefitting from the US downturn, and they expect nothing short of a climb and an expansion in their business to many more countries in the world. Does this seem like a crisis? Indeed no. Remember too, even with the slow -down of jobs we have been seeing, we are on the cusp of the 2010 Olympics, which will generate more jobs as well. Consumers, there is no need to fear the purchasing of a home. It may come at a turbulent time south of the border, but the slow- down of the real estate market was one that is often seen at the end of a booming cycle, and is natural. In fact, NOW is the all time greatest time to buy a home. It IS a buyer’s market out there with a huge amount of inventory to choose from, which allows you the consumer to have the opportunity to be more choosey than you may have been allowed to in the past booming market now that the prices are stabilizing.
To finalize, below is a quick excerpt from a mortgage broker that I work closely with on a daily basis and hold to high esteem. He has never proven myself, or my clients wrong:
“The Bank of Canada has kept prime steady at 4.75% and there is now pressure for a drop in prime at the next announcement October 21st. The experts are predicting that the bank will drop slightly or hold steady until the end of 2009 and then we will start to see about a 1% climb in prime in 2010.”
“All of the U.S. problems were totally preventable and the root of the problem was greed. In Canada our traditionally conservative approach by the banks has turned out to be a blessing. The Canadian banks have very little sub-prime exposure in Canadian markets and our sub-prime market is only around 5% versus 35% in the U.S. The housing market here has had a necessary price correction and the market is rebounding as sales are taking off again.”
So, to respond to the media’s scare tactics, this market is returning to a normal one, with prices levelling out. Our lending practices are far tighter and conservative, and the banks all state it. Each professional I turned to, to seek solid advice on today’s economy all have said the same things. We are solid.
So folks, if you have ever thought of buying a home and having a sound investment for you and your family, NOW is the time. I urge you, if you still don’t believe me, go out there and do the research: ask the economists, banks and such. Do not let the reporters determine how your life should be lived, where you go, and be the end all of all you know about the world.