Statistics Canada revealed the latest economic data of Canada last July 31 and it showed that the country in inching to recession little by little with its 0.2% drop in the economy for the first half of 2015.
Douglas Porter, BMO chief economist, said that "there is no sugar-coating this one. It's a sour result."
The result shocked the economists as they didn't expect that the economic percentage will drop again resulting to a contraction in the first quarter of the year yielding an annual rate of 0.6%. There is a possibility that Canada may not fall into recession this year despite of its negative GDP growth rate for the past two consecutive quarters but serious conflicts may arise.
Canada has conducted some attempts to recover from the economic drop. The central bank lowered the interest rates to 0.50% last July which is the second slash this year, but it is still unclear if this move can help the economy. Consumers are also having fears over housing bubble in the metro cities such as Toronto and Vancouver.
In a report released by the deputy chief economist of TD Bank, it's stated that "in light of its hotter price performance over the past three to five years and greater supply risk, this vulnerability appears to be comparatively high in the Toronto market."
TD Bank also predicts that there is a "medium-to-moderate" chance of a "painful price adjustment" to real estate properties due to overbuilding of unsold units, high home price- to- income ratio and increase in housing prices.
Housing markets are also not in good shape as some of the places have already started losing value. A fall of 0.2% in the resale value by the end of the year and total home sales drop of 22% for this year are already predicted by The Calgary Real Estate Board which is contrary to the group's initial prediction of rising home sales by January with 1.6%.