The Canadian real estate market is an interesting conversation piece. If you look at the overall national average, real estate seems to be at an all-time high, but if you take a closer look things aren’t exactly as they seem.
The reality is that there are a handful of cities in British Columbia and Ontario that are giving a false reading of the national average. These few cities are going up at such staggering rates that they mask the fact that many communities across Canada are seeing minimal growth or some are even seeing small drops in housing prices.
That is why it is so important that when investing in Canadian real estate we stress the importance of looking at the community. What is the population growth rate in the community you’re looking to invest into? Is there growing wealth and job opportunities? What about growing infrastructure? These are all important questions we look at before investing in a community.
That being said, the big economic picture in Canada is destroying people’s wealth if they aren’t putting their money into hard assets.
If you’re saving your money in the bank and expecting your income to increase your wealth then you’re going to be left behind.
In Canada, especially in Ontario and British Columbia, income levels aren’t keeping up with hard asset prices like real estate. Cash in the bank is becoming worth less every year because of low interest rates. More money is coming into circulation, making cash worth less and less.
Look at the money you have saved in the bank. How many hard assets could it buy today compared to last year or the year before?
It is our opinion that you have to act now because we believe low interest rates are here much longer than anyone is willing to admit.
Those who have hard assets are seeing their wealth going up every year, and those who don’t have hard assets are falling further and further behind, and it becomes increasingly difficult to afford hard assets like real estate in Canada.
We would rather see people buy property (or another hard asset) out of fear that if you don’t buy now your wealth won’t keep up with the rest of the world.
You need to get some of your net worth out of cash (or money in the bank) and into hard assets if you have any chance of protecting your wealth in Canada’s low-interest economy.
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