forma condo.Canada is in recession. A mild recession is likely to come. Many Canadians have experienced one or two recessions, but for others, it will be their first major recession in adulthood.Please Visit: forma condo to Get Your VVIP Registration Today!
These young people under the age of 30 may be considering buying a house, or may already have a house. Others are fresh graduates who have just entered the highly competitive job market.
The word “recession” may be reminiscent of the turmoil of 2008-09, when the global financial crisis triggered a seven-month recession and a long recovery in Canada, unlike the brief recession in the early stages of a pandemic.
A recession is usually defined as two consecutive quarters of negative GDP growth. Experts say a mild recession is most likely in 2023, as well as a more typical recession. No two recessions are the same.
Normally, central banks cut interest rates sharply during recessions, but they are unlikely to do so in 2023, said Sal Guatieri, an economist at the Bank of Montreal. The Bank of Canada has made it clear that it will continue to raise interest rates until inflation is brought under control. Canada’s inflation rate is still well above its 2 per cent target.
Guatieri said that while house prices are likely to continue to fall as the recession further exacerbates downward pressure on the market, borrowing costs will not fall with it.
David Macdonald, a senior economist at the Canadian Centre for Policy alternatives (Canadian Centre for Policy Alternatives), says monthly payments will increase significantly for anyone who wants to renew a mortgage in the coming year or more.
Laurie Campbell, head of customer finance and health at Bromwich+Smith, said some people may decide to postpone the purchase of the first suite.
“this will prompt more people to enter the rental market,” she said, putting upward pressure on rental prices.
Guatieri said that although rents soared in 2022, recessions usually hurt homeowners more than renters, and he expects rent price pressure to fall in 2023.
“the environment for the next six to nine months is really good for renters, because a weak economy will not only slow the rate of rent increases, but will eventually further depress prices and allow renters to enter the housing market.”