Facts about the Market

If you were walking down a street in Paris, France and a stranger stopped and said, “I’ll bet you’re from Los Angeles!” You would typically respond in a polite Canadian fashion and inform them correctly that you, in fact, may look like an American but are indeed from Canada. Whereupon, the stranger would exclaim, “Congratulations, your country is certainly a world leader in fiscal restraint and banking legislation.”

A fictional tale, yes, the people are false but the facts are true. Therefore, why do we continue to listen to Chicken Little? “The sky is falling!” “The Bubble is bursting!”

FACT: This summer real estate sales were down more than 30% compared to last summer, BUT PRICES CONTINUED TO RISE BY 6%.

FACT: Last summer reflected a pulling forward of sales that would normally happen later in the year as Buyers raced to beat the HST and capture the low mortgage rates.

FACT: Real Estate Bubbles happen when speculators are extremely active in the market. We are not seeing any evidence of this. The U.S. Real Estate bubble burst largely because of a speculative, loosely regulated mortgage market which created massive defaults. CANADA’S RATE OF DEFAULT IS .44%.

FACT: The quick rebound in the housing market has been the key to Canada’s recovery from the recession. The fundamentals of our economy remain sound. Contrary to the U.S., Canada’s labour market has also rebounded from last year’s recession.

FACT: Canada is on track to lead the Group of Seven this year in economic growth. The Organization of Economic Co-operation and Development is forecasting a growth of 3.5% in 2010 and 3% in 2011.

FACT: In February, the Government of Canada introduced further rules which made it harder to qualify for a variable rate mortgage and increased the down payments of investment properties.

FACT: IT WAS A BEAUTIFUL SUMMER! Real Estate is a seasonal market.

CONCLUSION: According to the August report from the C.D. Howe Institute, Canadian housing policies, which avoided the sharp decline in underwriting standards seen in the U.S., worked well in reducing the possibility of a housing bust in 2008-2009, AND CONTINUE TO MITIGATE THE RISKS OF MASSIVE DEFAULTS IN THE FUTURE.

The right Real Estate agent makes all the difference. You can count on Bosley Real Estate’s 82 years of experience as well as my expertise and service to help you sell or buy a home.