Credit Revulsion Update

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The Bank of Canada 
just released its Q1 2013 Senior Loan Officer Survey and Business Outlook Survey.  

"The balance of opinion regarding the demand for credit from financial institutions was negative during the first quarter. The decline largely reflected lower demand from corporate borrowers."

"Capacity pressures and hiring intentions are essentially unchanged, fewer firms report labour shortages." 


"Taken together, responses to the spring survey indicate that, following a recent slowing in economic activity, firms expect business conditions to remain challenging over the next 12 months."

The business lending market is a reflection of the real economy because lenders complete their due diligence and risk management by qualifying credit risk in real time, but not so much in the residential lending department where competition is high and a 5% down risk filled residential mortgage is fully insured by you dear tax payer, via CMHC. 

If you are planning to take on a really big mortgage, make sure you can derive income from the real estate you buy sufficient to pay the cost of holding it and that you have transportable skills so that you can move to where the jobs are. Canadians are indeed on the move going to where the earnings are. See the Atlas Van Lines Migration Map and the latest Canadian Earnings Chart.

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