Walk around the different cities in Canada, and you won’t even need to read the news reports to know that the real estate business is booming. There’s construction going on everywhere, and condo developments are mushrooming everywhere.
Ironically, this wasn’t supposed to happen. At least that’s what some experts have been saying. Numerous professionals have been warning about a slowdown the real estate market for the last few years, but no one’s paying attention to them. It’s business as usual, and everything seems fine.
Here are some reasons why the Canadian market seems as sturdy as ever:
1. Essentially, among Canadian property builders and buyers, there’s a sense that the need for housing just won’t stop in its tracks. There’s a certain sense of inevitability to the increasing prices. It’s as if every year the prices of houses and condos go up by 10%.
What that means is that for buyers, now is always the best time to buy a house. That’s because most people believe that any delay can be very expensive. There’s no point in waiting for a drop in real estate prices when both buyers and builders don’t believe that such an event will ever happen.
2. Real estate in Canada is also seen as a blue chip commodity, especially when compared to other news-hogging prospects such as Bitcoin. The cryptocurrency has made lots of financial headlines recently over its surge, but many acknowledge that its wild fluctuations hardly make it a reliable investment.
In comparison, real estate fluctuations are gradual and slower. In addition, the trend seems to be going up all the time. Also, Bitcoin’s popularity is temporary, while houses and lots are much more real.
3. The Canadian economy is also doing very well these days. Most people have secure jobs, and employed people like to have their own property. Since most of these workers are going to the bigger cities where the jobs are offered, it stands to reason that there will be a great demand for housing in these cities.
4. Populations are also rising all the time. In addition, it’s projected that there will be a million more new immigrants coming to Canadian shores within the next three years. All these people will need a place to live in, and they will drive up the demand for housing property.
5. Because of the robust Canadian economy, investors are also putting their money in Canadian real estate. That’s true even now when there’s a new tax on foreign buyers in Vancouver and Toronto. The rate of overseas buying remains strong despite these taxes nonetheless. Some find ways to get around the tax legally, while others simply shrug it off as a part of doing business. They figure that even with the tax, they’d make a profit in the end.
6. Many prospective buyers also discover that it’s not impossible to borrow money to buy a home. The lending rates are more than reasonable, and they’re on the low side. Some five-year fixed rates are set at just 3% a year. The floating rates are at about 2%.
So will the bubble burst? Despite the warnings, no one thinks so. Too many people need homes in Canadian cities, and lots of developers are eager to meet the demand and make money along the way.
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