Ongoing Hope For Soft Landings – “Growth should actually gain momentum this year rather than crashing as it did the U.S.”

“Some observers became panicky about a serious collapse in the market, perhaps because they believed that Canada was just like the U.S. had been in 2006.
But what we’ve seen in the ensuing months says that this interpretation was entirely wrong. Housing really is somewhat overpriced and it will indeed be the weakest part of Canada’s economy this year, notes economist Arlene Kish at IHS Global Insight, a big economics consulting firm, but it “will not be following in the footsteps of the U.S. housing downturn.”
Instead, it will be more of a typical cyclical downturn, with housing investment — including new construction, renovations and all sorts of related spending — dropping by a significant, but hardly catastrophic, 1.7 per cent. With others sectors of our economy picking up a little steam, growth should actually gain momentum this year rather than crashing as it did the U.S.”

– from ‘Canadian housing market finds its feet’, Jay Bryan, The Montreal Gazette, 15 Mar 2013
[hat-tip to ‘Ryan’ who told us about this story via e-mail]

Added to the ‘Premature Calls Of A Bottom‘ sidebar collection.
– vreaa

12 responses to “Ongoing Hope For Soft Landings – “Growth should actually gain momentum this year rather than crashing as it did the U.S.”

  1. In Canada nothing out of the ordinary is going to happen, Only bulls will mewl like cats and roosters will lay eggs, and housing will drop by 1.7%

    • Ralph Cramdown

      Presumably the forecaster meant that the housing downturn was going to take 1.7% out of GDP, and the reporter misunderstood.

      • 1.7% out of GDP would get us back to the high side of normal. I don’t think we’ll stop there, do you?

  2. [NoteToEd: SoftLandings!? TeeHee! I was actually going to save this for the WeeWees ‘o Monday – especially allowing for the prevailing DisturbanceInTheForce…. Never mind all that, more importantly, DearReaders – your clip above is the closest version extant to the original Ampex24Track – and which same also includes a selection of poignant archival footage/stills {not found elsewhere}…

    Naturally, as always, TheInstructiveParable is in the lyric… [it has something to do with TheCity’s FX FibreOptic @DawnMondayMonday]


    [NoteToRalph: Thank you. I feel much better now… Of course, that bottle ‘O StemWinder combined with LiberalLashings ‘o Selma Hayek may also have helped.]

  3. Carioca Canuck

    Well, judging from the conversation with a bank today, when I called asking where my T5 slip was (it is tax time after all), they seemed to be doing everything thing can to prepare for the worst, and to minimize the damage that they know is coming. Soft landing…..heh……a “flaming crater” is going to be more like it.

    The customer service agent says to me (after taking about 5 minutes to determine that she can actually send me another T5 to replace the missing one, which seemed very suspicious)………”I noticed that you have several credit card payments (2 X VISA, 2 X M/C and AMEX) and a couple of cars payments regularily coming out of your accounts”……..I respond……”yes”……and she says……”I can really save you a lot of money”……..and I reply in a baited voice……..”OK…….just how would you do that ?”……and she says “well, we can lower your high interest rates and you’d save thousands”……… which I reply again…..”How ? My closed end car lease is 1.9% and my wife’s car loan is at 0%…….and we always pay our credit cards off in full each month, and NEVER, EVER carry a balance so we don’t pay interest”………crickets are all I hear, so after about 10 seconds I say…….”have you ever seen either of us draw on the unsecured line of credit in the last 3 years we have had it ?”……and she says “no”……..”so what makes you think we need to borrow money, do you have access to the balances in our other banks accounts on your screen ?”……..”yes”…….more silence……

    They’re trying to rewrite everyone they can and reduce people’s TDSR’s as much as they can from the sounds of it, because I started to ask her why the cross selling for debt consolidation was so strong, and she said that they just wanted to to whatever they could to “help their customers out”……..she offered to increase our LOC limit too……on the spot…I said no.

  4. You’ve been blinded by cynicism. Banks are trying to make up for lost mortgage business by offering tax and personal loans. Offering competitive rates for debt consolidation is one way to build market share.

    Your teller was not trying to help you nor was she trying to position the bank for an upcoming ‘flaming crater’. Instead she was trying to reach her quota/bonus and the bank as a whole is trying to increase revenue.

    • 4SlicesofCheese

      What percentage of a banks business are mortgage related? How would you quantify a flaming crater?

      • yes, the question is the spread and, recently, the required reserves

      • [NoteTo4Slices: Generally speaking, they look like that. NoteToEd: Any similarity to Global FinancialContagion is purely coincidental. Bullish for DirtBikes, though.]

      • Real Estate Tsunami

        It depends on the bank.
        Banks have different risk profiles.
        Canadian Western Bank, for instance underwrites mostly commercial mortgages, which are inherently more risky, therefore its spreads are higher.

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