Vancouver Real Estate Performing Above It's Weight Class

The recession risks are even less in Canada. The economy had strong momentum in the first half of 2007, with real GDP advancing at a 3.9% annualized pace in the first quarter and 3.4% in the second quarter. While the recent financial turmoil and the lingering problems in the asset-backed commercial paper market and real estate markets will temper the pace of expansion in the coming quarters, the impact should prove modest.

There is no reason for Canadian lenders to tighten their credit standards in a significant way, since they were never loosened like in the United States. The subprime mortgage market in Canada was only roughly 5% of mortgage originations in 2006, compared to 25% Stateside. Exotic mortgages, like negative amortization mortgages, and low introductory teaser mortgage rates are not part of the Canadian, BC, or Lower Mailnad Realty landscape. The continuing pressure in short-term private sector financing rates, with a wider spread on Banker Acceptance (BA) rates over their government counterparts may have a negative impact in the near-term, but we believe that conditions will normalize over time. And, the current levels of borrowing costs for the economy suggest that the financial turmoil has had less impact than the equivalent of a quarter point tightening by the central bank.

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