This Month In Real Estate (Canada): January 2009

Good decisions and great investments start with a good understanding of the market. This is the monthly edition of Canadian Real Estate news by Keller Williams Realty's stars, Jay Papasan and Bryon Ellington. Here is the video on the topic.

"Economic data Feb 10th 2009 From the Economist Intelligence Unit: Canada"

• The Conservative government and the prime minister, Stephen Harper, face possible defeat at the hands of a coalition of the three largest opposition parties. However, the Economist Intelligence Unit expects the government's revised budget proposal to settle their opponents by increasing spending commitments and tax cuts, and the coalition will dissolve for now. The Liberals will then return to building support under their new leader, Michael Ignatieff, as the Tories struggle to deal with the recession and a growing fiscal deficit. By mid-2009 the Liberals will again join forces with the other opposition parties to force another election, which they will win.
• One foreign policy priority for the Conservatives has been to repair strained relations with the US, and this will continue under a Liberal government in the second half of 2009. Growing US protectionism will continue to affect trade, as the US economy slows and unemployment rises, and continuing security concerns will keep border controls tight. However, US-Canada trade links are very important to both, and the North American Free Trade Agreement (NAFTA) that binds them will be unaffected.
• The general government finances will move into deficit in 2009 and 2010, as the economy weakens and spending increases, and will not return to surplus over the forecast period. The Bank of Canada (the central bank) will cut interest rates again in early 2009, mindful of the deflationary impact of the global financial crisis, before raising them again from the first quarter of 2010 as the economy begins to recover.
• Canada’s long-term economic fundamentals remain strong, but the economy will contract in 2009, weighed down by the continuing recession in the US and other key developed-world export markets. Weak external demand will affect the domestic labour market and lead to a sharp increase in unemployment, and subdue private consumption growth. The previously buoyant commodity sector has also been hit hard by falling prices, but will strengthen in 2011 and help fuel a pick-up in investment and private consumption in 2011-13.
• The current-account balance will move into deficit in 2009, driven by a narrowing trade surplus as export markets contract and commodity prices remain weak. The Canadian dollar will stay weak in the first half of 2009 and provide some assistance to exporters, as global deleveraging and soft commodity prices reduce demand for Canadian assets, but it will strengthen in 2010-13.

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