SHOULD YOU BUY, SELL OR HOLD IN THIS MARKET?
With the slowdown of the Canadian housing market, people are wondering whether to buy, sell or hold their greatest asset. Often, we rely on the predictions of expert analysts to give us some direction but the trouble is, they are not all predicting the same events. I’ve heard everything from modest price increases, to flat, to a 5-25% correction. So who is right?
Unfortunately, I don’t have a crystal ball but I can tell you the predictions that I’ve found to be the most accurate over time have been those of the economists at TD Bank. A “Special Report” released by TD in March speculates that gains in housing prices over the last decade have been exceptionally strong and the next decade of real estate will be a “payback” period. Canadian home prices have climbed on average by 5.4% annually since 1980, including a spike of 7% a year in the last 10 years. The report argues that this “real estate bonanza” of the past decade has come to an end. It does not predict a collapse in house prices as some analysts have speculated. Rather, it expects to see a gradual, modest, downward adjustment over the next two or three years, followed by average annual increases of 3.5% after 2015. This will equate to an average overall gain of 2% a year in the upcoming decade. While taking into account the cost of inflation at 2%, home prices will remain relatively flat.
If these predictions come true and we do see a moderate correction in the short term, rest assured, history has shown us that real estate over the long term is a good investment. How you interpret and act on these or other predictions now should have everything to do with your unique personal situation and goals. Call me today for a customized home marketing and/or buying consultation designed with your specific needs in mind. Work with me and find out just how pleasant and profitable your next real estate experience can be.
With the slowdown of the Canadian housing market, people are wondering whether to buy, sell or hold their greatest asset. Often, we rely on the predictions of expert analysts to give us some direction but the trouble is, they are not all predicting the same events. I’ve heard everything from modest price increases, to flat, to a 5-25% correction. So who is right?Unfortunately, I don’t have a crystal ball but I can tell you the predictions that I’ve found to be the most accurate over time have been those of the economists at TD Bank. A “Special Report” released by TD in March speculates that gains in housing prices over the last decade have been exceptionally strong and the next decade of real estate will be a “payback” period. Canadian home prices have climbed on average by 5.4% annually since 1980, including a spike of 7% a year in the last 10 years. The report argues that this “real estate bonanza” of the past decade has come to an end. It does not predict a collapse in house prices as some analysts have speculated. Rather, it expects to see a gradual, modest, downward adjustment over the next two or three years, followed by average annual increases of 3.5% after 2015. This will equate to an average overall gain of 2% a year in the upcoming decade. While taking into account the cost of inflation at 2%, home prices will remain relatively flat.
If these predictions come true and we do see a moderate correction in the short term, rest assured, history has shown us that real estate over the long term is a good investment. How you interpret and act on these or other predictions now should have everything to do with your unique personal situation and goals. Call me today for a customized home marketing and/or buying consultation designed with your specific needs in mind. Work with me and find out just how pleasant and profitable your next real estate experience can be.