The Value of Real Estate

The Value of Real Estate

The Value of Real Estate

In a Savings Portfolio

“Real Estate provides unique benefits beyond other financial assets that can’t be measured by statistics alone.”

An article written by a Royal LePage Economist in 2016 has been true, the value in real estate has had great results. Parse the numbers any way you want, but the reality is the same: housing has been a good investment for Canadians for a very long time, which in turn has solidified the health of the broader economy.

We took a look at the way the value of real estate in Canada has grown over the past two and a half decades, or basically since the days of the recession in the early 1990s.

Gains in real estate does not just mean that Canadians feel wealthy; in actual terms it means that they are wealthy. From time to time we hear that the financial markets bring about better gains than does real estate, and that can certainly be true. We all know that there are stocks that have doubled or tripled or increased ten times in a short time. That said, picking those stocks is a difficult task, even for seasoned investors.

In contrast, the historical experience for Canadian real estate investors has been that there were few wrong picks at all. If the stock market goes down sharply, investors can be left wondering if they will ever recoup their value. If the housing market goes down, homeowners still have their major asset – the home they bought and in which they live.

In a broader economical sense, the wealth that Canadians have built up in real estate is a cushion to the economy. Real estate is an important component, and often the most significant asset in the savings portfolios of many Canadians. With massive baby boomer retirements on the horizon and with many worried that they have not saved enough in financial assets, the fact that they have real estate holdings is a positive thing both for boomers and for the larger economy.

Is there any guarantee that the value of real estate will continue to grow at historical rates? Of course not, any more than there is for any other asset. Unlike other assets, however, residential real estate provides unique benefits in the form of a place to live and the satisfaction of being a homeowner. Clearly, we can’t measure the value of real estate by the statistics alone.

Do you have questions about buying or selling real estate in this market? We are very happy to answer your questions or discuss the Ottawa market with you. We are experienced Ottawa and Kanata REALTORS®  and we would be pleased to help you, a family member or friend. Feel free to contact us!