Solid Advice on Buying Real Estate
You don't wait to buy real estate, you buy real estate and wait! Why do I say this? It really is quite simple: inflation!
If you purchased an average single family home in Vancouver in 1960, that house would have cost you $13,105. Your 5% down payment would have been $655.25. That's right folks - for the same price as you would buy a bicycle today you could have purchase a HOUSE in Vancouver back in 1960. I actually have a friend whose parent sold two bicycles back in the 60's to be able to come up with their down payment to buy their house.
That same house in 1970 would have cost $24,000.
That same house in 1980 would have cost $100,000.
That same house in 1990 would have cost $230,000.
That same house in 2000 would have cost $296,000.
Today that same house would be worth approx $1,200,000!
For an investment of $655.25 your return would have been $1,199,344.75. That does not factor in if you were smart and added a mortgage helper suite to rent out. Real estate has been and will continue to be the number one wealth builder worldwide PERIOD!
It really does blow my mind how people fail to factor in inflation. Back in 1960 an ice cream cone would have cost you 10 cents. I took my son to MooLix over the summer. It was $4.00 for a kid's cone! That is inflation. Gas prices are higher, food prices are higher, clothes are more expensive, etc. Inflation is not going to stop. I was in Mexico in November. It cost me close to 30 pesos for a coffee. Could you image paying $30.00 for a coffee in Canada? It seems insane but it will happen eventually.
I bet if you told people in 1960 that their $13,105 house would be worth close to $1,200,000 in 50 years they would have laughed at you and thought you were insane. Think about this one - if inflation continues on the same track it has been on for the last 50 years, the AVERAGE single family home in Vancouver will cost approximately $6,700,000 in 2040!
Interest rates are at a historic low. Real estate prices are down. Rent prices are up. You do not pay capital gains when you sell your primary residence in Canada. If you can quality for a mortgage whether it is for a first time home, vacation home or an investment property and you do not buy right now, you are an IDIOT!
Here's a fun fact for you - if back in 1960, instead of buying a house you put that $655.25 under your mattress, do you know how much money you would have today? That's right $655.25.
Lake Okanagan Realty