The word “recession” can sometimes cause many of us to sit back and worry about the state of the Canadian economy, the stock market, real estate prices and our job security.
A recession is generally defined as two successive quarters of decline in Gross Domestic Product (the total value of goods produced and services provided in a quarter) which is exactly what we have experienced; therefore, technically we are in a recession for the first time since 2008 and 2009.
But wait a minute! Historically recessions trigger the Bank of Canada to lower rates but just recently the Bank of Canada announced that it was leaving the benchmark rate of .5% sensing this recession might already be behind us. Most economists are saying the recession, mostly due to the retreat in the energy sector, is already over according to July numbers.
The real estate market doesn’t seem to pay much attention to the word recession either! The Financial Post reported: “Canadian housing starts rose 12 percent in August to the highest level since September 2012.” Although there are some local or regional disparities, we should be encouraged that consumer confidence is solid and the demand for home ownership hasn’t slowed down at all.