Housing prices set to decline?

[Guest s******ecan****]

If you are planning on buying property or refinancing your mortgage you may want to read this article

[Miss Scarlett 25073]

The link doesn't work.

[Capital Hunter 18263]

Yes the link doesn't work. It froze my computer for a while.

 

Housing prices is the one sure bet that is always up in the long term. There may be some adjustments here and there however, over a period of several years it will be always up. The recent tightening rules by finance minister may affect housing market adversely and slow down the rate of growth in the short term.

 

Ottawa has traditionally had steadily growing housing market and prices has risen already by almost 5% over the past 12 months (and over 7% in 2010) though the rate of growth is expected to slow down just a bit in the short term.

 

http://www.ottawarealestate.org/news_release.shtml

 

while housing prices in Calgary has dropped.

http://www.financialpost.com/news/Canadian+house+prices+fall+third+straight+month/4171275/story.html

 

Most economics agree that in the middle term (next 5 to 10 years) the rate of growth in prices will slow down compare to the upsurge in prices we experienced in the past 10 years.

[Guest s******ecan****]

Apologies for the broken link, it is now fixed, it really is an interesting article and one worth reading.

 

 

Housing prices is the one sure bet that is always up in the long term. .

 

 

 

There is no such thing as a sure bet..... and long term is a relative "term". There are areas of Japan were housing prices have still not recovered their pre 1990 "bubble" value. Some parts of Florida and Arizona have experienced decreases so severe even if 5% growth returns it would take a generatio just to return to 2008 levels. Whole swaths of Detroit have been simply abandoned. Obviously these are extreme examples but again the idea that any "investment" or purchase is a "sure bet" is a myth.

[Paradise Spa 24019]

I am a Realtor and in all fairness we cannot predict the future this is reality.

[Capital Hunter 18263]

Over long term, say a generation (considered to be about 20-25 years) or even medium term (say 10 years) can anyone please point out to one single Canadian town or city that housing prices have actually come down!!! over that period of time, at any time in the history?

 

Now I do agree it is hard to predict the future but for somethings, the past history is a good indication of the future. For example, I will look older 10 years from now and that most items will be more expensive 10 years from now that a house or condo I buy today will be more expensive 10 years from now!!!. And oh yes we will still be paying taxes 10 years from now :-(.

[capitalman 3861]

Immigration will continue to fuel housing demand in Canada, especially in Ottawa where Government is the chief secure employer. Speculators are always anticipating the decline of house prices yet they continue to climb, year after year. They may "self-correct" eventually, but only short term then they will climb again, as always. Unless Canada has some major revolution or nuclear disaster or cuts Immigration, the trend will continue, imho.

 

If you're thinking of buying a house, do it as soon as you can or you may never be able to.

[5IVESTAR 105]

glad links were fixed interesting article none the less.

 

Housing costs tend to recycle through out different areas. Maintenance of the property and neighboring properties also can affect pricing

[Guest Bri*****e Da****]

With graduation creeping up on me soon, my mum keeps reminding me that I should start looking around at buying property and stop renting (she likes to call that throwing money away, hah). I do hope housing costs go down before that time comes!

[Blue Hornet 2080]

With graduation creeping up on me soon, my mum keeps reminding me that I should start looking around at buying property and stop renting (she likes to call that throwing money away, hah). I do hope housing costs go down before that time comes!

There are studies that have been done that actually support renting over buying, but you need to look at your own situation - what you can put down, what your monthly costs will be, value of money over time, if you think you might move around for your job, if you're comfortable doing a fixer-upper or if you want new, what an increase in mortgage rates would mean, etc, etc.

 

The big advantage to owning over renting is pride of ownership, you should never look at your own house as an investment b/c you'll always have to live somewhere. Real estate, like anything else, is subject to short-term fluctuations and although Ottawa is somewhat insulated by the vast number of secure jobs in the public sector, there is no such thing as a sure thing.

 

Investing in real estate is owning property that you rent out or that you buy purely for investment purposes (like buying farm land where you think the city might grow out to in 20 years).

 

It's a many-edged argument, but what you need to do is get out your spreadsheet and look at your own situation and costs. That's my 2 cents, anyway

[Guest s******ecan****]

A common mistake people make is assuming their home purchase is an investment. Fact is in certain markets you'd be far better off renting and investing the difference (mtg payments, plus property taxes, plus maintenance etc) into better performing investments that are also eligible for preferred tax treatment.

 

Buying a house is really more of a lifestyle choice and it is best seen in those terms. Unlike like borrowing to invest you can't deduct your interest cost of a mortgage. A house is generally not very liquid, you can't sell "part" of it, (and if you did sell it you still need to live somewhere so will still have housing costs) and violates the principle of diversification. All this for a historical rate of return which is scarcely better than the rate of inflation. Factor in your aquisition costs, property taxes, and the cost of maintaining your home, your real rate of return may in fact underperform inflation.

 

Buying an investment property of course is a different matter and does give one the opportunity to get some tax benefits as well as investment income. Investment properties do however suffer from being undiversified, and illiquid compared to many other investments.

 

Buying our own piece of the earth is in our blood and is almost primal in the North American experience, but in contrast to the oft quoted " a home is your biggest investment" the truth is closer to " a home is your biggest purchase".