Economy 53,072 Posted January 22, 2019 Share Posted January 22, 2019 https://www.bnnbloomberg.ca/can-canada-slip-into-recession-without-the-u-s-bca-says-yes-1.1201891 Since 1951 Canada and the US have have their recessions together going thru the same cycle but this time in nearly 70 years there may be a divergence Canadas consumers have a debt load of 175% of disposable income while in the US it fell from 140% just before recession to less than 100% now While the US is powering ahead Canada may not be able to tolerate the rising rates despite low unemployment and rising wages and the housing market and consumer spending could crumble How fast rates continue to rise and how much wages rise to compensate may determine whether a recession is triggered or not Link to post Share on other sites More sharing options...
JustAnother 5,113 Posted January 22, 2019 Share Posted January 22, 2019 Whelp. We’ll catch up sooner or later. Link to post Share on other sites More sharing options...
Economy 53,072 Posted January 22, 2019 Author Share Posted January 22, 2019 18 minutes ago, JustAnother said: Whelp. We’ll catch up sooner or later. Hopefully not Link to post Share on other sites More sharing options...
JustinTrudeau 2,419 Posted January 22, 2019 Share Posted January 22, 2019 So how would this affect things like the housing prices? I was in middle school when the 2008 recession happened, so I'm not totally aware of *what* happens to the average person (middle-class with a full time job). I fell down the stairs once as an actor. Link to post Share on other sites More sharing options...
Economy 53,072 Posted January 22, 2019 Author Share Posted January 22, 2019 Just now, JustinTrudeau said: So how would this affect things like the housing prices? I was in middle school when the 2008 recession happened, so I'm not totally aware of *what* happens to the average person (middle-class with a full time job). It depends on the nature of the recession Here in Canada our financial system and domestic economy on things like retail and services and Housing Market didn't get affected as much as the rest of the world so job losses there were minimal and with low interest rates encouraging more borrowing in no time those sectors were red hot during recovery Most job losses in Canada was jobs to do with manufacturing and exports because the world economy was down and our sales dropped This time were the ones with serious debt issues... So if a recession were to be triggered, housing, retail and services would likely be very affected Link to post Share on other sites More sharing options...
Delulu Rogers 7,676 Posted January 22, 2019 Share Posted January 22, 2019 Haven’t been people been talking about a recession and a big housing boom since 2008? I feel like it’s become one of those things people keep talking about but never happens. (Obviously there will be one at some point but besides the point) If a recession were to happen it wouldn’t necessarily mean housing prices would go down and even if they did go down 100,000s of dollars, people who have saved money living at home or in condos will jump on the chance and drive the market back up again. Then again, I know nothing about this stuff so please feel free to tell me your thoughts and outlooks Link to post Share on other sites More sharing options...
Economy 53,072 Posted January 22, 2019 Author Share Posted January 22, 2019 15 minutes ago, ChrisC said: Haven’t been people been talking about a recession and a big housing boom since 2008? I feel like it’s become one of those things people keep talking about but never happens. (Obviously there will be one at some point but besides the point) If a recession were to happen it wouldn’t necessarily mean housing prices would go down and even if they did go down 100,000s of dollars, people who have saved money living at home or in condos will jump on the chance and drive the market back up again. Then again, I know nothing about this stuff so please feel free to tell me your thoughts and outlooks Unlike the US Canada's housing market has remained tight despite the long boom and vacancies remain at record lows so bidding wars continue... In Canada it's unlikely the housing market itself will be the trigger of the recession... But if a Recession does happen as a result of high debt and people loose jobs and wages fall likely this time it would affect the housing market more than in 2008... But it's unlikely to be as severe as the US downturn because of tight supply and supply and demand is at play But general consumer debt is an issue. Australia is the only country in the world that as a whole the economy including consumers are more indebted than in Canada Canada's consumer and private sector debt now equals 100% of GDP (or equivalent to an entire years economic output), only Australia has an even high ratio That's extremely high leverage... Anything like rates rising too fast or a slow down that stops rising wages (to help compensate for rising rates) could trigger a downturn Link to post Share on other sites More sharing options...
.thumb.jpg.99c40bc2a10ded8236a48b4fe15c6be8.jpg)
Featured Posts
Archived
This topic is now archived and is closed to further replies.