They had an ’emergency’ panel over at the Economic Club of Toronto this morning before Stats Can releases some reports that may freak people out. That’d be the building permit reports today, and the housing price index and labour force survey on Friday. The five pannelists were Warren Jestin of Scotiabank, Don Drummond of TD Bank Financial Group, Avery Shenfeld of CIBC World Markets, Douglas Porter of BMO Capital Markets and Craig Wright of RBC Financial Group.
The lead of the Financial Post article is very telling.
Canada’s economy will post little or no growth over the next year as world growth slows and the U.S. battles recession, a panel of Canadian economists said Monday. – FP
What that’s saying is that the slowing of the economy will be due to external factors, and not due to any flaw or issue with the Canadian economy. It’s due to a slowdown while the US digs itself out, and the rest of the world gets things reset and moving again. When Craig Wright from RBC says “[US] recovery would take a long time”, he’s talking about 2-3 years. I agree, and 2-3 years of slow US growth is ok with me.
Warren Jestin from Bank of Nova Scotia predicted an interest rate cut of a full point in the overnight rate, which would be fine with me, but I am concerned about inflation in the west, primarily as a resident.
As an Alberta real estate investor, Avery Shenfeld from CIBC World Markets made a comment that made me happy.
As the global economy sinks into recession, both federal and provincial governments should not go out of their way to avoid deficits.
Alberta’s been in the black for a while now, and it’ll be important to maintain that.
It’s time to buy in Alberta
Slow growth is fine, and the housing market will remain a buyer’s market. The economy which powers Alberta’s growth is fundamentally strong, and this global slowdown will be like holding a runner back with an elastic band….eventually it’ll let go. The damper will be off and thing will be running full steam again. In the mean time, we’ll be showing flat or small growth when the rest of the world is going backwards.
Don’t get freaked out. Buy smart, make sure it cash-flows, and hold for the long term. In five years things are going to be very, very different, and whatever the economy does, in the long term Alberta real estate is your best bet.