Real estate in Canada has been hot over the past six months, with many people looking ahead to potentially unstable times and wondering if they should get out.
But the thing is, real estate in Canada never had the same housing bubble the US did in 2008. Things here have been consistently more stable over time than in the United States.
While the Vancouver market has gone up and down, it’s overall trend has been up in the past 20 years. Nelson has seen historical highs, with endless predictions of the market dropping…but when we look at the stabilizing effects of the market I predict it will remain strong.
Canada’s basic elements keep our real estate market strong even during unprecedented times:
- We have a historically stable Democratic Government, and have had for many decades.
- Rule of Law with a strong population of rule followers that protect our stability.
- Definitive property rights where you don’t have to worry about your investment if the government changes, (a real consideration in other areas of the world).
- Stable Banks who did not need a government bail out in the 2008 Great Depression.
- Near record low interest rates allowing for faster paydown of principal than ever before, with no signs of that changing any time soon.
- Years of quantitative easing in our future that will likely end with inflation of hard assets (such as Real Estate).
It’s always essential to remember that ultimately your home is not an overnight, or market-based investment.
In my years as a mortgage broker I have seen that – in the long term – most people regret having sold their home.
And that, no matter when you buy, you will eventually be glad that you did.
Sure there are better and worse times to buy or sell real estate, but a home is not just “real estate”, it’s the place where you live, raise a family, and build dreams.
The fact remains that over the long haul a home in Canada will, in 99% of cases, prove to be the best investment 99% of people make in their lives. And that “investment” will pay out not only in years of stability, and having a place in a community, but also as you pay down any mortgage and your house’s worth slowly rises, as it has everywhere over the long term when you are speaking in decades and not years.
In my opinion, you shouldn’t worry about “cashing out” on your home. This is a time to get the right mortgage that you can afford, and hunker down into the home you love.