It was inevitable that as the economy began to slow the first place it is usually seen is in the manufacturing sector.Usually the last place for the ice to build up is in the housing sector.This is exactly what has happened.It is no surprise to anyone really.The consumer is jittery about the future and a big ticket purchase like a home is the last thing on their minds.
Most Canadians are already feeling the pinch of debt and that is their first concern.Reducing it is the priority while at the same time attempting to save a few dollars for an emergency.One of the greatest impact on debt reduction is of course in the credit card industry.It seems that while interest rates from the banks have generally stabilized and in some cases fallen, credit card rates have not.
This was an area the Federal Government of Stephen Harper had promised to clean up.Other than a couple of meetings with high level executives of these companies, nothing has happened.It seems that the government is good at holding closed door meetings then announcing they did so, only to follow up with no action.It is a pattern.The consumer remains buried.
What confuses this writer is the report of TD Economics that contradicts the one issued by the Canadian Real Estate Association for the same period of October 2008.The one agreed upon point seems to be that a decline in the markets is inevitable in 2009.That is a reasonable prediction.
It seems that the TD Report is backed up by that of Scotiabank.Their forecast of a slowing economy across the board are remarkably similar to not only TD but to actual results.
The silver lining to this is for the Canadian who has the resources to buy property for income value.It appears that there will be some good bargains to be had, particularly in multi family dwellings.They seem to be taking the largest drop in value as well as being the first to suffer a slowdown in construction starts.The rental market is sure to remain if not increase with the lack of consumer confidence, so with low interest rates and some good equity into a property, there could be some good investment in this area.Still, there is always risk and any purchaser should be prepared to take a loss on the income for a period of time.A good business plan and some solid professional advice could prove to be invaluable.Talk to your banker.