In a February 29 piece for HuffPost Business Canada, long-time YPNextHome writer and analyst Wayne Karl pointed at the fundamentals—aside from official figures pointing at a 1.5 per cent growth rate for the economy in 2016 and 2.5 per cent for 2017—that would make Canada’s real estate markets a good choice for investors.
The main driver of performance remained, of course, the consistently low interest rates that have been attracting both domestic and foreign investors in droves. These rates are expected to last throughout the year.
“In its latest rate announcement on Jan. 20, the Bank of Canada held its target for the overnight rate at 0.50 per cent, citing a setback brought on by a decline in oil and commodities prices,” Karl wrote. The next BoC announcement is scheduled for this month.
Another factor propping up Canadian real estate is the high volume in leading markets such as Toronto and Vancover, where record levels of growth in sales and prices have been observed in the past few years.
“Longer-term performance for these markets is off the charts. Greater Vancouver average home prices rose 20.56 per cent in the last year, 31.58 per cent over the last three years. For the GTA, the figures are 10.69 and 27.44 per cent, respectively,” Karl noted, adding that the warmer weather of the coming springtime would spur greater market activity.
Most importantly, previous records showed that Canadian real estate has never failed its investors in the long run.
“Sure, Vancouver and Toronto have shown the most spectacular historical growth, but even unsung markets in eastern Canada have performed well over time,” Karl assured.
“Naturally, buyers might not too jazzed about getting in when prices are dropping, fearing their home's value will go down after they purchase. But look at the longer term. In Calgary, prices have increased 14.29 per cent over the last three years; in Saskatoon, 2.07 per cent.”
Despite economic setbacks due to weak oil and a flagging currency, Canadian real estate has historically been a proven performer in the long term, and a real estate analyst noted that this year is shaping up to be no different from this track record.