Since the onset of the pandemic the Federal Government has understandably reacted by invoking various economic stimulus. The negative consequence of this is that we have to borrow money to pay for the stimulus and than print money to service the debt. It is widely known economic theory that when the money supply increases drastically, vendors of goods and services pick this up by increasing price levels. This is in addition to the supply chain issues that have been blamed for

There is no doubt that inflation is creating pressure on interest rates to rise. To understand what is likely to occur with interest rates going forward, I believe one important variable to look at is what the low interest rate environment has created. Low cost of capital has certainly created opportunity by allowing businesses to grow but it is also responsible for inflated asset valuation levels that have come mostly from the ability to borrow. In other words, there is an i

Statistics Canada just published the most recent inflation numbers, rising to 3.7% during July. Prior to COVID inflation hovered around 2.0%. An increase in price levels of nearly 100% within a short period of time on the surface is concerning. Lenders base their returns on future receivables so inflation is one very important consideration. With COVID having lasted so long the supply chain has been impacted with many manufacturing facilities either shut down or operating at

From the onset of the pandemic it was clearly necessary for the Federal Government to introduce economic stimulus. An entire economic shut down is an unprecedented event and the inability to generate income for many required a temporary income substitute. Now more than 16 months after the onset of the initial shutdown, family savings rates are up, consumer spending and debt are down, and mortgage debt has effectively replaced consumer debt. Normally, consumer debt (i.e. cr

It seems the latest on the residential market just in is that there are less bidding wars and frantic buying as was the case not long ago. Have not seen this manifest into lower valuations as of yet but time will tell. For now, a more balanced or restrained market should be seen as good news. #recg #commercialvaluations #realestate #boc https://storeys.com/fewer-buyers-offer-night-gta-real-estate/

There was considerable anticipation leading up to yesterdays Federal budget unveiling. Many expected that the Fed's would resort to some invasive measures in light of the red hot real estate market. Aside from a vacant property tax aimed at foreign buyers there was not much else that could be construed as an intervention. However, the overall economy is growing at a faster pace than expected. Therefore, if the Bank of Canada thinks the current economic stimulus is not require

There has been much talk as of late about interest rate trends. Interest rates have been temporarily and unrealistically low due to the impact of the pandemic. This has caused a frenzy among both sellers and buyers. A low interest rate environment will not benefit property owners in the long run. A seller that gains on a higher purchase price due to low cost of borrowing will pay it back when the table is turned on them and they become a buyer in the same market. In the end,