The government continues to lower its borrowing rates to stimulate the economy, but we can only expect an upturn once we start spending, according to Benjamin Tal, senior economist for CIBC. The public, however, isn't spending because of their fears in the economy. It appears we are now caught up in the old classic chicken and egg scenario! We don't spend due to the economy, but the economy won't improve until we spend.
Our friends in Ottawa have committed to a fiscal stimulus package to the tune of roughly $30 billion dollars in new spending this coming year. The bulk of this money will be put towards infrastructure, more specifically job creation, as infrastructure spending is proven more effective than cutting taxes. $10 billion of the infrastructure spending will potentially create more than 110,000 new jobs and inject economic growth by up to 1.5 percentage points.
This stimulus package has the Bank of Canada optimistic about our economic future and predicts for a healthy economic recovery in the second half of this year. Benjamin Tal agrees and also believes that this combination of monetary and fiscal stimulus will be powerful enough to turn things around in the second half of this year.
What does that mean for you?
Well, if you were planning on buying a house in the next couple of years, you should consider getting into the real estate market now, before the upturn occurs. Once the economy begins to gain momentum in the latter part of this year, both interest rates and property values will begin to rise.
For more information on buying or selling real estate in Burlington or Oakville, to answer questions about current market trends, or if you are interested in receiving mortgage and interest rate information, please visit me again on my website www.seansells.ca or call me at 905-220-9198 and I'd be glad to answer any questions to accommodate all of your real estate needs.