MAY 2022
     The talk of the town has been... Yes, you guessed it, interest rate!

     BoC is doing whatever it can to steer our economy away from runaway inflation. And rightfully so, as double digit inflation is no joke (the current CPI growth is 6.8%). With that said, quantitative tightening (QT) policies are only helpful to the extent that they do not make irreversible damages to our economy. 

     At only 0.8% national GDP growth in the first quarter of 2022, recession is just lurking around the corner. We are not exactly very well-poised in an all-out fight against inflation. For the time being, there are lots of tough talk to continue raising the interest rate to choke out inflation. But when the economy finds it hard to breathe under water, our central bank may start to change its tone.

   Whether we like it or not, inflation is here, and it's likely here to stay for a while. At times like this, finding good inflation-hedge assets to preserve your wealth becomes top of mind. Crypto currencies have proven to be unsuccessful for this purpose (have you heard of stablecoins, the crypto currency invented to battle inflation? Spoiler alert, it did not work). The US stock market is currently wrestling with bears as many companies have lost hundreds of billions of dollars in market value.

     As for real estate, the Metro Vancouver market is still showing positive growth year-over-year. No, a single family home on the west side will not "take you to the moon" in 2022. But at a time when everyone's dollar is shrinking, a real estate investment with intrinsic value is a good way to preserve your purchasing power. A standard lot will always serve the same purpose and stay valuable to its occupants, no matter where the dollar goes. Afterall, it is called real property for good reasons.

     Hope you have been faring well in the past months. Whether you managed to stay in good financial shape or have taken on some losses in your investments, remember that markets come and go. But there are always things we can be thankful for. We have our loved ones with us by our sides. We are in good mental and physical health. And the good weather is finally upon us! 

     I hope you have a wonderful month of June. Talk to you again soon!

Your Favourite Realtor
Joseph Liang