In case you’re concerned about the media warnings of the “bubble” bursting in what is often called “The Canadian Real Estate Market.” I ask you: What precisely is a “Canadian Real Estate Marketplace?” States, cities, towns, and even neighbourhoods all differ. Real Estate costs in Vancouver, BC are very distinct than in Windsor, ON. Both cities are Canadian but they have about a $700,000 gap in average home prices. Real estate increase in King City, ON is substantially different than Toronto East (yet they are just 45 minutes apart). With changes so vast within such much small geographic places how can the media summarize all real estate activity in one class (The Whole Country)?
My personal and professional belief is the fact that a microeconomic approach is a much safer method to understand the true inherent real estate activity as it pertains to realistic purchases and actions. Unless you’re a global investor comparing Canada to the remaining part of the planet, then it won’t do much good to review statistics on Canadian market activity as a whole. Even if you’re a global investor, it’s far better nail a few locales and research their performance independently rather than collectively.
So, then what’s this marketplace and when will it burst? The answer to that is unfortunately NO ONE KNOWS. We’ve been hearing about this for the greater part of 5 years yet we have yet to see it. Interest rates continue to be steady and for the first time in modern Canadian history three important banks have offered the lowest fixed mortgage rates ever (2.99%).
With low interest rates and also a booming immigration system bringing in the proper mix of contributors to our economy, real estate is an excellent investment (provided folks are willing to hold on if the marketplace dwindles a little). The inquiry is how long must people hold on? Whether people wish to believe it, we (Canadians) will probably not experience the same home fiasco that our buddies in the US experienced. This website covers Eddie Yan more thoroughly. Even if we use this microeconomic approach for a US home operation analysis, we will find that not all US cities have experienced this substantial downturn and that many cities weren’t strike really hard and are rebounding fairly well. Once more, an all encompassing categorization of real estate operation by nation doesn’t even apply to the present US catastrophe. Consequently, how can it be used to assess a much more fiscally average and culturally diverse country like Canada?