I have been out of country for a while and just catching up on rate news and predictions, last year everyone was scared rates were going through the roof and prices would come down because of rates and supply in the latter part of 2010, now rates arent going up and in fact coming down. The majority of people listen to media, housing experts predictions, forecasts etc. They have all been wrong!
Sideliners have been watching since 2000 and then again in 2008, what a run to miss out on. With uncertainity in stocks, gold and real estate are viewed by most as safe haven inv.
CG, from what I've read I think you are a marketer/salesman who says what will best move product, rather than truly believing what you say. But if I take this last post at face value, allow me to point out errors and contradictions therein.
1. You are charting the RE profits from trough to peak. This produces a highly misleading ROI for any asset class or investment.
2. You refer to the profit of RE for the last 10 years as a lost opportunity for anyone who didn't leverage into that asset class. However, gold has increased in price 6 times over that period, more than double real estate. So may we presume that you would agree that anyone who invested in RE was foolish for not instead buying gold? May we similarly presume that you are know selling your RE so that you can buy gold?
3. Ulimately, your comment about RE having increased over since 2000 and also since 2008 is similar to the gambler who presumes that because a roulette wheel has come up red 10 consecutive times, he was a fool for not betting a large portion of his net worth on red for those 10 spins.
4 Finally, 10 years ago many experts forecast that tech stocks were overvalued based upon earnings. But the uneducated masses were riding the euphoria of the speculative profits (unsupported by earnings), subsequently lost most of their paper profits. Those of us who argue that Canadian RE is overvalued, base those arguments on metrics such as the cap rate (the net rental income compared to the current market purchase price). In other words, we say that Canadian RE is overvalued based upon earnings, same as the tech bubble in 2000. There is nothing wrong with riding a speculative bubble to windfall profits, just so long as the savvy investor knows when to exit.
It seems to me that those who argue in support of Canadian (or Toronto) RE price sustainability, base their arguments upon retroactive results and factually unsupported theories (asian investors, new immigrants). I haven't read anything logically coherent to explain why our RE prices are sustainable long term at these levels.
I applaud anyone's good fortune. And if someone made a fortune from pets.com or Las Vegas real estate or whatever and then sold at the right time, more power to them. But for every person who cashed in their speculative profits, there are several others who lost it all (and more).
In conclusion, risk/return move in lockstep together and there is no path to easy wealth. I encourage any investor to consider their diversification and their ability to withstand a 25% drop in any of their held asset classes. If any reader of my post thinks a 25% drop in RE is not possible and therefore merits no consideration, then I would encourage you to do further research. Or you can keep your eyes focused happily on the rear view mirror, cackle happily as you ignore the "construction ahead - slow down" signs from guys like me, and hit the accelerator. Good luck either way.
Interested, yes I agree with those bullets. I think that much of the western world has been increasingly borrowing from future consumption, and that we were protected from the consequences of that in 2009 by unprecedented fiscal and monetary policy. But more borrowing does not cure the consequence of too much borrowing. I think all of this will effect jobs/incomes/consumption in many countries for the next decade or so, and I can't see any reason why our real estate wouldn't be affected.
With interest rates staying low this is the best time to buy, it really is common sense!! Buy in at low and pay as much as you can to take advantage, it look like a good few years IMO. All I can say is buy buy buy!!!
Forget the rest come get the best!