If this Coronavirus gets REALLY bad. What will the effect be on the market and what’s the worst price drop we could expect?
The virus demonstrates two things:
- There are still Black Swans circling overhead that are unpredictable in their scope and their impact.
- The virus demonstrates the interconnectivity between most countries in the world. We sell a car in Vancouver, parts of which were made in Toronto, Milwaukee, China and Germany.
Thousands of people touched the products and services that are made worldwide and thus a virus takes on a different kind of dimension. It can grow faster and more worldwide than ever before. We are now at 76,000 people infected. Will it affect Vancouver? To the extent that we are a gateway city, there will be fewer tourists to the city, fewer tourists to Whistler, fewer tourists to Alaska.
In fact, to book a cruise now would probably be the lowest price cruise you’ve ever enjoyed. So, the virus affects everyone and everything – yes Vancouver too!
Major Point: The virus has dropped bond yields by around .3 per cent and thus fixed rates have fallen .3 per cent. If the virus spreads, the one positive will be lower rates. Review all your mortgage renewal dates, we may well see the all time low 5-year term coming in the next five weeks.