Canada Mortgage and real estate markets "fundamentally different" from north of U.S. Border
There is a sharp interface between psychology and economics. Every now and then it is worth stepping back and try to analyze what is just "psychological economics" of the most "fundamental" economic quantifiable numbers, indicators and trends. This is the position of Canadian Finance Minister Jim Flaherty took in a speech to analysts and journalists gathered on May 12, 2008, noting "fundamental" differences he sees between the state of mortgages Canada and the real estate markets and the U.S..
Emphasizing what he called "a steady drumbeat of negative media coverage on the state of the U.S. economy, "Mr. Flaherty lost no time in trying to distinguish the psychological distress that Canadians can experience from constant whistling news coverage that tracks the continuing deflation of the speculative housing bubble and the merger of U.S. marketsoth subprime-mortgages border. the position of Mr. Flaherty, in essence, is that continuation of coverage the media on both sides of the Canada-US border contributes unnecessary psychological concern by Canadians is not justified by economic fundamentals of the Canadian housing and mortgages market.
I believe that, "Mr. Flaherty said," It spills over into the readers in Canada and their impact on Canadians. "Whatever political leanings of astute observers of the Canadian political and cultural environment is likely to recognize that the Minister of Finance is correct in assessing of how deeply the psychology of Canadians is affected by what he sees and hears in the media about what is happening in America. Canadians have learned to study closely the developments and trends in the U.S., and somewhat wary of optimistic eyes cast at the world's longest undefended – by now – border on the issues that are affecting our largest trading partner and closest political friend.
"Often when you pick up the periodic economic forecasts are being revised downward, "Mr. Flaherty noted (as reported by Les Whittington in the Business section of the Star Toronto). "And certainly there has been a psychological effect of the recession in the U.S. housing sector."
But how of the negative psychological effect that seems to have slowed growth in the Canadian residential real estate has been caused by the distress that natural feeling to watch our American cousins in the fight sink into recession, and how much to look at the fundamentals of our mortgage market, our housing market? And therein lies the problem. . . .
The economy, such as psychology, despite its vaunted formulas, trends and methodologies monitoring, is a social science – and the collective cultural psychology affects Canadians Canadian Mortgage and housing markets may more than any other sector of the economy. Our houses are near and dear to us. This is why Mr. Flaherty was at pains to stress the more quantifiable "fundamentals" Canada's housing and real estate markets. In this way, emphasized the differences that he sees us and our situation as distinguishin them and their housing problems:
– Canada, according to Mr. Flaherty, "the strongest economic fundamental of all major industrialized countries "in the G-7 – with unemployment near record low consumer inflation very moderate prices and balanced budgets more or less constant that is advanced by the federal and provincial governments alike.
– Canada has so far shown a remarkable resilience and buoyancy in the face of the fall of the U.S. housing market caused by the "sub-prime mortgage collapse, one Canadian dollar is more or less on par with the U.S. dollar by first time since the oil crisis sessions after mid 1970 and manufacturing competition stiffer than ever, from abroad. (Help delighted that Canada has vast oil and gas reserves that sustain our energy sector.)
– In addition banks and financial institutions Canadian mortgage brokers have been better able to weather what quickly became a global credit crisis in any great measure due to the most conservative of Canada, the institutional and regulatory risk adverse.
That is Mr. Flaherty's essential argument why Canadian investors owners and potential home buyers must maintain its continued confidence in the Canadian mortgage and real estate markets. Whether the assessment of the Minister Finance "market fundamentals" versus "market psychology" is correct is perhaps the heart of the issue of how While the Canadian weather the rough seas that are stirred by the financial storms that are blowing on its southern border, and it is this issue that forced the statement of Mr. Flaherty to gathered media,
As a former lawyer, I know that is rarely possible to prove a truth beyond doubt. Only time will tell, as the saying goes. But in law school, my most respected and "Paper-Chase-ish" professor said: "Always You can tell the truth, because it has the ring of truth to it. "analysis of Mr. Flaherty's major fundamental differences between Canada and the U.S. ring housing and mortgage markets for real.
The bells that Canadians can now listen to metal are more likely to sound those of the buoys that are rising and falling with the radical change in economic fundamentals south of the border. Canadian research their options to purchase or refinance your home house is not unnecessarily need to interpret what they hear and see as the alarm bells, though – although that may be critical of Canadians 'psychological' propensity, given the close cultural and emotional needs of Canadians have their U.S. cousins.
About the Author
For information on Canadian mortgages, and your
home purchasing
and
home refinancing
options visit
www.canadianmortgagesinc.ca
to consult with a trusted Canadian mortgage broker who can provide you with reliable mortgage advice and the mortgage product that is right for you.
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