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What has remained constant in all the changes? People still by new homes and condos
The new home and condominium construction industry has seen an amazing number of changes over the past few years. To accommodate evolving purchaser preferences, designs morphed to more open-concept layouts.
This also helped with the shrinking of sizes to keep price points attainable, because open concept “lives” larger than square footage might dictate. Although on the rise, interest rates have been historically low, inviting more demand.
In the meantime, increases in municipal and provincial red tape have played a key role in our lack of housing supply, causing a huge spike in home prices. The pandemic brought its own collection of challenges, which resulted in new ways of conducting business electronically, as well as materials shortages and more demand for work-from-home spaces. But you know what has remained a constant through all of this? People STILL buy new homes and condominiums.
Why? For one thing, family circumstances shift. Young people grow up, start careers, marry, have children, and so on. Empty nesters move to more compact surroundings to make their lives easier.
We have also seen an exodus of employees to the outskirts of major urban centres where they can work from home in residences that are more financially feasible than in the city.
Then, of course, there is an ongoing shuffle of people moving because of work transfers. Occasionally, inheritances make moving up a possibility. Real estate is an ongoing dance that helps to keep our economy thriving.
What’s fascinating is that whether real estate buyers are end-users or investors, their purchases are still investments. And what a great investment it is. As one example, a condominium in the Greater Toronto Area that sold for $339,978 in April 2012 sold for $789,869 in April of this year. That’s a 132 per cent rise. You can see where a condominium can make a great nest egg for retirement or for passing along to future generations.
Then look at the overall picture: real estate is an investment that you can understand far more easily than stocks, mutual bonds or the up-and-coming bitcoin universe. Remember that in Canada, we have not experienced the meltdown the U.S. had a few years ago.
Our banking and financial systems are thankfully conservative and do not allow for people to buy homes who can’t afford them. Even real estate investors who rent out their spaces understand what that means in terms of paperwork, effort, and financial gains. So, you can live in your investment, sell it, rent it out … the flexibility is appealing.
The bottom line is that in the long run, an investment in real estate remains a wise decision regardless of how the market changes. Whatever the future brings, people will always need homes to live in. That’s one thing that will never change.
Debbie Cosic is CEO and founder of In2ition Realty and has been involved in the real estate
industry for over 30 years. Visit www.in2ition.ca