October 2022
I have reproduced an article written on 8 October 2008, that was 14 years ago. That was the worst the world economy had ever been in recent times:
“So what’s your property worth? Right now, that is on 8 October 2008, in the middle of a world economic and financial crisis and in the midst of two national elections?
Tough call.
As one observer mentioned, it’s like asking what’s your house worth when the kitchen is on fire, and the fireman have not put it out.
At this moment, there is really very liquidity in the market. So, no money to finance transactions, no processing of mortgage applications, no corresponding approvals. Everything is simply “on-hold”.
Caution is wise. In fact, it’s called for in this economic environment. A new US administration will have the authority of the North American consumer so select the right course. Leadership on this issue will be very important. We are still over a month away. But, markets look 18 months into the future.
From a Canadian perspective, remember:
1) Canada has the strongest economy of the G8 countries
2) Interest rates are at historical lows
3) Residents of other countries are anxious to move to Canada
4) There is a continuing need to provide housing for new immigrants in the GTA
5) The Canadian banks are among the best capitalized banks in the world
You know, it might be better to concentrate on the World Series this month. Soon enough, the 2008 October financial crisis will be over, and markets will normalize once again.”
Comment
Let’s have a look at those factors:
From a Canadian perspective, remember:
1) Canada has the strongest economy of the G8 countries. Now, not quite, but still at the top.
2) Interest rates are at historical lows. 5% is still very, very low!
3) Residents of other countries are anxious to move to Canada. Now, even more than ever before.
4) There is a continuing need to provide housing for new immigrants in the GTA. This situation has grown worse not better over the years.
5) The Canadian banks are among the best capitalized banks in the world. This is still the case.
Wouldn’t it have been a good investment to have purchased real estate in October 2008?
Brian Madigan LL.B., Broker