The Canadian Economy: It just keeps on ticking

A new report released by RBC`s Economic think tank indicates that the Canadian
economy is expected to continue growing this year, and even recoup losses caused
by the market crash of 2008 and subsequent recession. The chief economist at
RBC, Paul Ferley, was confident enough to claim that the Canadian economy
would exit the recovery phase this quarter and enter into expansion.

However, in an interview with the QMI news agency on June 10, Ferley claimed his
optimism is cautious as the sovereign debt crisis in Europe could slow the flow of foreign capital.

The question is, what does this mean for the Canadian real estate market?

This optimistic estimate comes on the heels of a report by the Canadian Real Estate
Association that the real estate market is expected to cool down to to higher interest
rates and over supply. However, its questionable how much this expected "cool down"
will affect Vancouver furnished apartment rentals as real estate in this city is in a
perpetual bubble due to geographical limitations. There also seems to be a perpetual
demand for luxury rentals in Vancouver, and Coal Harbour rentals, so any decrease
in rent will be negligible.

The city still holds the title of most expensive real estate in the country.

Regardless of this expected cool down in the Canadian real estate market, there
won't be a market shock as we witnessed in the United States. The Canadian
financial markets seem to be devoid of the high-risk mortgage backed securities;
frenzied trading of which helped perpetuate the market meltdown.

For now the Canadian economy and real estate market, as Mr Ferley
suggests, will remain strong and attract foreign investment. Canadian real
estate prices will undergo a mild market correction, though it is doubtful
that any downward trend will be noticeable in Vancouver as there will
be a permanent demand in the city for corporate housing, executive
suites, and furnished apartment rental.