The Canadian Q1 GDP report was published today showing a further stagnation in economic growth which paired with the unemployment rate reaching 6% is a likely sign of a June or July interest rate cut from the Bank of Canada. The chart below courtesy of RBC shows the impact with the likely 7th straight quarterly decline in per-capita GDP growth.
What is the impact of all this data to real estate investors?
Taking a step back this data along with related indicators is showing us that the Canadian economy is hitting its likely bottom meaning there are investment opportunities for those looking to take advantage of the temporarily weak demand. The second driver is the recent Federal budget capital gains tax increase which is already driving an increase in selling activity as folks look to capitalize on a lower tax rates for dispositions made prior to June 25, 2024.
For savvy investors these opportunities can lead to some great opportunities and with variable rate financing they can benefit from the likely upcoming interest rate cuts by the Bank of Canada.
We are advising a number of clients today on how best to navigate this economy and we would be pleased to assist you in your real estate investment decision-making. Our clients make their decisions based on data and a robust financial model that considers the tax implications of their investment structure. Feel free to reach out at Info@FinalyzeCFO.com to learn more about our finance, accounting, and tax services. We take pride in being the Trusted CFO Advisor to real estate investors, investment firms, and developers.