Quote:
Originally Posted by tmacdougall
Get your crystal ball out folks, I would be interested to hear your thoughts about about what a bear market (recession) would mean to this region, during and after the downturn. Is it possible for Greater Moncton to push through a downturn? If not, can the region recover and continue on a path similar to what we are seeing now.
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Sometimes there is a value in living in a part of the country with a (relatively) sluggish economy.
During the Great Recession 12 years ago, the impact on the Maritimes was relatively modest (at least compared to central Canada and the US). The old adage "the bigger they are, the harder they fall" applies here.
For example, if you live in a city with a really hot economy (like Toronto), things like property values inflate really quickly during the good times, making home owners feels disproportionately (and unreasonably) wealthy. If you are suddenly a real estate millionaire, this could influence your spending habits, which in turn fuels the overall economy and a virtuous cycle begins, leading to irrational exuberance.
Suddenly a stock market crash comes, people lose their jobs, demand for real estate evaporates, home valuations plummet, and suddenly, even if you still have a job yourself, you are a lot poorer. You haul in your horns and stop spending. The local economy thus contracts and retailers and restaurateurs go out of business. Everyone suffers.
Real estate in the Maritimes is much more stable. The overall economy here is not as cyclothymic as in the big smoke. Things will get worse here, no question, but the cycle here is not as exaggerated as it would be in central Canada.
Life goes on.........