Marnie Bennett Reacts to Possibility of Canadian Housing Bubble

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Bloomberg asserts that Canadian banks are underperforming; however, real estate professional Marnie Bennett believes that Canada’s banking organizations are well-regulated and capable of facing the financial crises threatening the Eurozone.

Bloomberg reports that “Canadian banks are underperforming global counterparts by the most in a year as record consumer debt and a housing market that’s vulnerable to a correction weakens their earnings prospects and risks a credit downgrade.” Although Standard & Poor has announced a negative outlook for seven Canadian banks, real estate professional Marnie Bennett believes that the banking industry in Canada is well-regulated and in good standing.

Standard & Poor’s decision to lower its outlook of these seven banks was based, according to the article, on “a prolonged increase in housing prices and consumer indebtedness. The debt of Canadian financial companies is the second-worst performer this month after Japan among 35 global peers, according to Bank of America Merrill Lynch data.”

Tom Connell, the lead author of the Standard & Poor report, believes that the Canadian economy is closely linked to the global economy and that several risks are intensifying: “We’re highlighting the potential risks gathering in intensity. The Canadian economy is exposed to the global economy. Consumer leverage and housing-price dynamics are really closely linked to prospects for consumer income growth.”

While it is certainly true that the global economy affects virtually every economy around the world, it is also true that some individuals believe that Canada is insulated enough not to be too significantly affected by global financial crises. Marnie Bennett asserts that, because it is not too thoroughly involved with European economic organizations, the Canadian economy will not be hit too hard should these organizations suffer a financial catastrophe.

“Canadian banks are ranked amongst the most respected, most highly regulated, and well capitalized in the world,” comments Marnie Bennett. “Canadian banks have limited exposure to European debt, so Canadian banks will be less affected if disaster strikes the Eurozone. Four out of the top ten banks in the world are Canadian institutions. Recent changes in lending criteria for Canadian mortgages will further solidify bank balance sheets. Many Canadian banks are expanding into the United States in an effort to boost their profits and diversity their holdings into value-based US real estate.”

These positive points awarded to the Canadian economy’s health are also considered within the Bloomberg article, which notes that Standard & Poor does not anticipate that Canada’s banking institutions will continue to lose standing. Additionally, the article asserts that Standard & Poor will consider the recent changes in lending criteria and other regulations with regard to Canadian bank ratings.

ABOUT:

A leader in the estate brokerage field, Marnie Bennett is a professional based in Ottawa, Canada. Founder of Bennett Property Shop Realty, Marnie Bennett offers condo and home development marketing tactics as well as innovative sales strategies for resale homes. The properties with which Marnie Bennett works range from starter homes to multimillion dollar estates. She leads her clients with industry insight and unsurpassed customer service. Furthermore, Marnie Bennett is dedicated to continually improving her professional capabilities in order to always offer leading services to her clientele.

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