Did Someone Say Recession? This Alberta Mortgage Broker is STILL Not Worried
As always, the headlines abound with stories of doom and gloom for the Canadian economy and its real estate. Here's the reality:
Prime lending rate: 5.45% (still very sane)
Canadian inflation rate: 7.0% (not so sane)
Canadian real estate price average Aug 2022: $637,673 (down 3.9% from Aug 2021)
Alberta real estate price average Aug 2022: $423,879 (up 1.8% from Aug 2021)
Beneath the headlines: The Canadian economy is still running hot. Global supply chains are challenged and nationally, labor shortages persist. While markets such as the Greater Toronto Area are seeing a steep price correction, Alberta real estate remains stable. This is in no small part because of the underlying strength in our economy which continues to diversify (think: tech tech tech). Oil prices have softened which is curbing inflation but many say 'core inflation' (excludes food and energy prices) remains, and to expect further rate increases from the Bank of Canada.
Just one broker's opinion: Recession appears to be inevitable. However, I would expect Alberta to experience a 'softer landing' than elsewhere in the country. This is particularly true for our real estate which will soften but likely hold its value above pre-Covid levels.
Always a silver lining folks!