I was just watching the news on television, CBC News World, when they did a story on how hot the housing market is here in Canada, and apparently we are setting records, with an average price for a home at $300,000.00. Within this buyer’s market is a super hot economy that is fueling the high housing prices. The Chartered Banks have now raised their mortgage rates for a second time this year to something like 7.14 percent, and our dollar hit another thirty year high against the US dollar.
The loonie closed up 0.58 of a cent at 93.15 cents US — its highest close since September 1977. During intraday trading, the dollar went as high as 93.36 cents US, according to Bank of Canada figures. (CBC NewsWorld May29, 2007)
With all of these records being broken, what happens when the economy starts to slow down? Will the job market keep up? I know, I am such a pessimist when it comes to this type of economic hype. Remember that I lived through the 1982-3 recession, thanks to then Prime-minister Brain Mulroney, whose fiscal management and the invention of the Goods and Services Tax crippled the country. I remember my parents who prospered through the 1970s, only to almost lose everything because gas, interest-rates and taxes shot upwards, and the Bank’s lending rate hit over 14 percent. I hope today people can pay for these homes they just bought with their forty year mortgages and with nothing down!