The economic and political woes of Greece continue to lead the headlines.  Greek politicians were unable to cobble together enough seats for a coalition government so another election is scheduled for June.   As it becomes more likely that Greece will leave the EU, many Greeks are withdrawing any savings held with Greek banks due to fear that Greece will return to the previous currency, the drachma.  Such a conversion would probably be followed by an extreme devaluation of the drachma, and the Greek public is trying to avoid any chance of holding onto a losing currency.   Current estimates show that such a devaluation would have to be in the 40% range for Greece to become competitive again. 

This week  saw some positive news from the US as inflation figures held steady while energy costs declined slightly which should alleviate some inflationary risk in the upcoming quarters.    US consumer confidence is at a four year high, and this is extremely important since US consumer spending is one of the largest economic segments in the world. 

In Canada, the Bank of Canada continues to exhibit concern that weak global economic conditions will lead to a few years of meager growth.    The good news is that interest rates should hold stable for the next while.  Meanwhile, the move to put CMHC under the regulatory thumb of the Office of the Superintendant of Financial Institutions may lead to tighter qualifying criteria across the board. Someone who qualifies for a mortgage today may find that they qualify for much less in a year from now, and that is assuming that the only change is the regulatory environment.   These potential changes should encourage buyers, especially first timers, to act now if they want to enter the property market.

 
Jason McLean  BSc, AMP
jason@garibaldimortgage.com