If you are concerned regarding the media warnings of the “bubble” bursting in what is often called “The Canadian Real Estate Marketplace.” I ask you: What exactly is a “Canadian Real Estate Marketplace?” Provinces, cities, towns, and even neighbourhoods all differ. Property costs in Vancouver, BC are very different than in Windsor, ON. Both cities are Canadian but they’ve about a $700,000 difference in average dwelling prices. Real estate growth in King City, ON is substantially different than Toronto East (yet they are just 45 minutes apart). With changes so vast within such much little geographic places how can the media summarize all real estate activity in a single group (The Entire Country)?
My personal and professional belief is the fact that a microeconomic strategy is a far 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 rest of the planet, then it won’t do much good to review statistics on Canadian market action as a whole. Even if you’re a global investor, it is far better pinpoint several locales and research their performance individually rather than jointly.
So, then what is this marketplace and when will it burst? The response to that is regrettably NO ONE UNDERSTANDS. We have been hearing about this for the better part of 5 years yet we’ve 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 flourishing immigration system bringing in the proper combination of contributors to our economy, real estate is a great investment (provided folks are willing to hold on if the market dwindles a little). The inquiry is how long must people hold on? Whether or not people want to consider it, we (Canadians) will likely not experience the same housing fiasco our buddies in the US experienced. This website offers valuable information covering Eddie Yan. Even if we use this microeconomic approach for a US housing performance evaluation, we will find that not all US cities have experienced this substantial decline and that many cities were not hit really hard and are rallying rather well. Once again, an all encompassing categorization of real estate operation by country does not even apply to the present US disaster. Therefore, how can it be used to evaluate a much more fiscally moderate and culturally diverse country like Canada?