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The Olympics have much overshadowed the normal economic chatter that occurs when the Loonie drops. It’s a nice distraction from much of the uninformed hype typical of mainstream media. A Google search even ranked a Canadian bronze medalist burying a lucky Loonie higher than much fear mongering.

It’s funny, because many of the same commentators who bemoaned the rising loonie years ago, now propose gloom and doom for the Canadian economy during this recent currency drop.

This blog is focused on Kamloops, so what does this have to do with local real estate?

As sophisticated long term real estate investors, we care about one thing: good paying jobs. Kamloops is largely a transportation economy, with mining, forestry and tourism major employers as well.

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What a falling Loonie means for Kamloops:
– exports are in higher demand because they are cheaper(many are priced in US dollars)
– increased truck and rail traffic
– higher profits for mines, the mill, ranchers, other manufacturers. These industries are major employers in Kamloops.
– potential for increased tourism as it’s cheaper to visit

In summary:

1. A cheaper Loonie for a time will likely encourage more investment locally, bring more jobs, increase housing demand, and eventually increase prices.

2. Another benefit of a declining Loonie is the Bank of Canada is likely to leave the overnight interest rate low for a long time. Cheap money is great when 75% of investment costs are within a mortgage!

What are your thoughts? How does a changing Loonie make you feel and why?

Until next time,

Stay S.A.F.E.