Sunday, December 14, 2008

RBC's comments on the Toronto Economy

I love the way that Banks and large financial and government instittuions try to 'soften' the blow of negative news. This article from RBC does exactly that. Should we believe them or is this just the tip of the financial icebery that is beginning to tilt?

Only time will tell.

I hope this finds you healthy and happy!

RBC reports, Toronto — No reason to panic, but consolidation ahead

In about two months, market sentiment turned on a dime in the Greater Toronto Area
this fall.

Until the end of the summer, the feeling was that the GTA was successfully negotiating a landing to a slower, more sustainable pace of activity since home resales had been gracefully trending lower since peaking in the middle of 2007 at never-before-seen levels.

However, reports of notable declines in prices and activity in many Toronto communities during September and October suddenly challenged that view.

While there is no cause to panic at this stage, the GTA market has undoubtedly entered a phase of consolidation. Earlier tightness has eased and buyers now hold more sway.

The area’s economy is facing serious headwinds, which will undermine household confidence. Affordability generally remains an obstacle to would-be buyers, although it has improved modestly in the past few quarters.

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