The U.S. government is on its way to approve an unprecedented bailout plan for the financial markets there. In Canada, we are fortunate in that our financial regulators and banks did not get over-leveraged (at least we hope so, at this point).
So what does this mean for Main St. Canada, and more specifically Queen St. in the Beach? Well, it certainly has a psychological effect since it is prudent to be concerned. However, the Canadian economy is different than the U.S.; we were fortunate not to have extended a large amount of credit in the sub-prime mortgage market, we export more oil than we consume, and our federal government is running a balanced budget.
The local Toronto real estate market is still strong, with sales only tracking less than 6% compared to the 2006 level at the same time (2007 was certainly a peak year) according to the Toronto Real Estate Board. But, prices are still up in the Beach area, and houses are selling for about 98% of the asking price on average. Not a bad market indeed, for both buyers and sellers.
Over the years real estate has generally proven to be a good investment when the financial markets are uncertain. If you are thinking about buying, you are in a good position.
George
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