Are You Looking for a Stable Investment? Why Don't You Think About Bricks and Mortar?

Is investing into a real estate property a good idea these days?

As an explanation to the most recent recession in the housing market in Canada, REMAX Canada wrote a report analyzing the local Canadian housing markets over the last 30 years. Over this period of time the report concludes that investment in bricks and mortar has always been one of the foremost and safest option.

The market for residential housing throughout Canada still amazed economists and housing analysts according to the report. In 1981, 1989 and 2008 there were big declines in the real estate market. Prices and sales have been increasing up for 6 months making the downturn in 2008 the shortest one ever. The housing market no longer rewards the buyer, more people are using leverage to finance housing investment.

There are a few reasons why there is a long term investment in the Canadian housing market. Real estate exhibits financial and material "fortresses" for most Canadian investors. Over the last three decades there has been a notable rise in the purchase of houses of over 6%. In some regions it is larger than that, for example, Calgary 74.1%.

Slumps in the real estate market have already been communicated, but even taking these into consideration, property investment is still a market that is rising in value. The Greater Vancouver Region has been the leader of this year''s market bounce back with 14% sales increase from January until August. Acceleration is coming from those buyers that are trading up but the most significant growth is by the first time buyer.

Vancouver is rated the highest performing market in the whole of Canada for housing price rises.

In Vancouver real estate prices have risen nearly 500% in relation to just over 350% for the rest of Canada since 1980. Home ownership increased from 58.5% to 65.1% during almost the same period (since 1981). Just contrast this with inflation for the same period. Using the Bank of Canada inflation calculator, it attained 156.6% for the equivalent period. In other words: investing $100,000 into real estate 30 years ago would bring you nearly $320,000 net return.

This fact is not news to nearly all Canadians. According to The Angus Reid Omnibus Survey (handled on September 15), 77% of respondents in Canada preferred investing in real estate instead of stocks.

Jay is a top Vancouver realtor.