Canada is Number 1, eh!

Well finally we are getting our credit. Were #1, were #1.....in banking? That's right in a report published by the World Economic Forum, Canada was noted as the most secure banking system in the world. I am sure Harper could not have timed this any better and after the blasting given by both Layton and Dion on the economy in the last weeks it was welcomed by the mouths of the conservitives like worms from a mother bird. Jonathan Kay comments in more detail about the report in this National Post blog.

For you the home owner/buyer/seller here in Waterloo Region and Wellington County, how does this effect you? Well shortly after this announcement the Bank Of Canada dropped prime by 1/2 a percent. You would think then that the mortgage rates would drop, right? Not exactly. If you were in a variable rate with a guaranteed prime less mortgage than you are good. If you are just now out looking to buy a home you are in for a shocker. The discounted variable rates that were as common as Jack Layton's rolled up sleeves are no more. Why is that, if prime is dropping? The issue is that banks are cautious in this time, mainly in lending to each other. This has them taking away the consumer discounts so they can be properly funded going forward (Canadian Mortgage Rate Breakdown).

As a buyer you are now thinking twice as the favorable mortgage rates are not as favorable and with people thinking that pricing is coming down they appear to be cautious and waiting. As a seller you have to be aware that people are being cautious. We are heading into, traditionally, the slowest time of the year and with the buyer caution out there it will take longer to sell. As previously stated the market also appears to be equilizing and prices dropping. Would be a good idea to look at finding away to drop your price with out hitting your bottom line.

So what is the plan Canada? Were number 1, now what? I guess years of record profits at the banks is paying off in the stats. What about the rest of us? Guess we'll have to sit back and continue to spend smart, spend cautious. Not sure I would resort to hugging your banker just yet.



M