“The recession will help my business – everyone is borrowing money and driving up their debt, so a lot will be looking to consolidate their debts into a mortgage,” Stephen Gilmour of Dominion Lending Centres
told MortgageBrokerNews.ca. “A lot of people are being driven by the recession to … to refinance.”
Brokers are still digesting Statistics Canada data release Tuesday confirming that GDP fell in the second quarter in the process taking the economy into recession for the first half of 2015.
StatsCan says the economy contracted at an annual pace of 0.5% in the second quarter of the year which is slightly less than analyst estimates and also lower than the 0.8% decline in Q1.
And that’s good news for brokers, according to a number of industry players.
“I don’t think the recession will have much of a negative impact on the mortgage industry; a lot of people will be looking to put money into real estate,” Siavash Rafiee of Mortgage Transit Inc. told MortgageBrokerNews.ca. “And that’s because rates are so low; people will look to invest in new property because they think prices will go up and that’s how it’s been for the last few years.”
Canada is currently the only G7 country in a recession, but at least one bank is optimistic the economy will show marked improvement for the rest of the year.
“June’s monthly GDP print that put an end to five consecutive monthly declines in GDP, the economy is showing signs of exiting the second quarter on stronger footings in such fashion as to set up growth momentum into the third quarter,” Derek Holt, vice-president for Scotia
Economics, writes in the bank’s latest economic report, entitled Canada Exits the Great Non-Recession
The “R” word may be bad news for the economy, but brokers argue their business is set to receive a push on both the refinance and purchase sides.