Do you remember 1989?
The real estate market in the GTA had enjoyed 15 consecutive years of rising values. The average home was worth $275,000. Then … the market softened. The average home price declined 28% over the next 7 years. The average home was not worth $275,000 again until 2002 … some 13 years later.
For anyone whose home equity is, or will be, a critical part of their retirement income, a repeat of this experience would be devastating. Last month the average home price in the GTA reached $446,000 … after 14 consecutive years of rising values.
We don’t see another “1989″ on the horizon….the world has changed drastically since then and of course, some of the key differences compared to today are:
- Historically low interests rates….rising, yes; but not soaring! And cycles are about increasing and decreasing rates, job growth, GDP, prices, inflation/deflation etc etc.
- Strong and continued growth month after month in Canada
- Unemployment is decreasing steadily
- Stock markets are “behaving”
- Canadian exports are up and manufacturing sector healthy
- Looney is “behaving” against the ‘greenback’
- Foreign investment is increasing and interest in the Canadian housing market (particularly from the wealthy in Mainland China) is noticeably visible.
All that said, to my purchasing audience, your Toronto House Whisperer’s sage advise:
INVEST WISELY AND SPEND WITHIN YOUR MEANS!!
(OH yes, and let me help you with that!!….I AM considered your real estate conscience AND your “voice of reason”!!)