This week, we’re hearing from our founder LJ about the recent RBC-backed article on Canadian housing.
I had just about everybody send this article to me and say, “Prices are going to decrease by 15% to 20%. What are we going to do?”
First of all, they’re predicting a 15% to 20% decrease in price on a national level. There are a couple of markets that really move real estate in Canada – particularly Toronto and Vancouver. I suspect that those markets will be hit a little bit harder than a market like Montreal. They’re usually the ones that feel shifts before anybody else.
Secondly, Montreal was climbing up the ranks fast. We were trying to catch up to what our valuation should have been, which wasn’t being reflected before the spike. I think that in Montreal, we’ll probably see a 5% to 10% price correction.
What this means is that in a worst case scenario, in my prediction, we’re going to get back to January 2022 prices. This move would simply eliminate the gains from the first half of this year.
Is that really that bad? Probably not. Most people buying real estate should be buying for a long-term play. I tell people that you should be planning to stay in a property for at least five years in order to actualize a profit.
If you were intending on buying a property to try and make a quick buck, in less than five years – let’s say in 12 months – chances are you’re going to be in trouble, because the appreciation we’ve been experiencing until now is not normal.
What we lived through for the last three years is completely out of the norm. And we have to remember that real estate is a longer-term investment, a slower play, and that even if there is a correction, things will bounce back over a couple of years.
Need clarity on something else you’ve read recently? Our team knows the housing market inside out. Reach out with a question and we’ll be happy to share some insights!