If you are worried concerning the media warnings of the “bubble” bursting in what’s often known as “The Canadian Real Estate Marketplace.” I ask you: What exactly is a “Canadian Real Estate Marketplace?” States, cities, towns, and even neighbourhoods all differ. Real Estate prices in Vancouver, BC are very distinct than in Windsor, ON. Both cities are Canadian but they’ve about a $700,000 gap in average house costs. 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 little geographic locations how can the media summarize all real estate activity in one class (The Whole Nation)?
My personal and professional belief is the fact that a microeconomic approach is a much safer way to understand the true underlying real estate action as it pertains to realistic purchases and activities. If you don’t are a international 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 are a global investor, it’s far better nail a few locales and research their performance independently rather than collectively.
So, then what is this marketplace and when will it explode? The response to that’s sadly NO ONE KNOWS. We have been hearing about this for the better 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 major banks have offered the lowest fixed mortgage rates ever (2.99%).
With low rates of interest along with a flourishing immigration system bringing in the proper mixture of subscribers to our economy, real estate is an excellent investment (provided people are willing to hold on if the marketplace dwindles a little). The question is how long must people hold on? Whether people need to believe it, we (Canadians) will likely not experience the same home fiasco our buddies in the US experienced. This website has a lot more information about Eddie Yan. Even if we use this microeconomic strategy for a US housing performance evaluation, we’ll find that not all US cities have experienced this substantial downturn and that many cities weren’t hit really hard and are rallying fairly well. Once more, an all encompassing categorization of real estate operation by state doesn’t even apply to the current US crisis. Consequently, how can it be used to evaluate a much more fiscally reasonable and culturally diverse nation like Canada?