Many places in Canada see extremely harsh winters. Houses that have stood the test of time have value in more than just location and amenities. They've also accrued historical value, as well as utility. A house that can survive a subzero winter for decades while remaining functional has exceptional sturdiness to it. That said, these houses aren't always properly represented by the market. Right now, China has been fostering a false bubble in Canada. Though predictions have been against the bubble's growth for the last several years, as of August, 2016, it has yet to burst. How this has been done is through foreign purchases of luxury properties. This kind of buying has facilitated an up-spike in property values.
Currently, Canadians are spending more than they make. There is substantial debt, and the housing bubble has pushed credit expansion to the furthest limit. As a result, the cost of homes today and their actual value aren't going to be equivalent. Some properties which are of exceptional value will be passed over because of their location, while newly-built subdivisions may boast outlandish prices, but never be filled with home owners. Indeed, as the bubble becomes undone, there will be a ubiquity of empty subdivisions priced unrealistically in Canada. When the bubble finally bursts, it will totally reshape the market.
Profiting in a "Down" Market
Excessive debt causes foreclosing and a ubiquity of apartment rental. There are going to be a lot of people that need a place to stay when the bubble bursts, but can't afford anything expensive, and certainly cannot afford to buy a house. Getting in now and buying up an inexpensive property with four or more bedrooms could be a great way to capitalize on this. Subletting (where legal in your community) can allow you to pay off your own mortgage incredibly fast. Imagine if your mortgage is $2000 a month, and you're able to take on four renters at $800 a month. You also pay about that much. Well now you're paying double the mortgage every month. On a $100,000 house just outside of town, you could have the property paid off from zero in two years and one month, depending on your APR. In such a case it would be wise to plan for about three years.
The key to profiting when a bubble bursts is to anticipate where the fallout is going to strike. If you're in a market that has appreciated wildly, selling immediately could make you a boatload of cash that can be turned into an even better property after the bubble bursts and prices plummet. Pay attention to the market, and plan ahead of it. They're saying the crash is imminent right now. But they've been saying the exact same thing since 2014. The fact is, market indicators are not the same as market predictors. Indicators can point to a good or bad market and turn up wrong every time. While there are many indicators which point toward a declination in Canadian real estate, as yet concrete predictors are not known--though China's stance on the issue, and their deliberate facilitation of the bubble, do point toward market collapse sometime in the near future.
Only Take Sustainable Risks
Whatever you do, be careful. In the real estate market, you've got to pay to play; but that doesn't mean going all in on your first hand, or even subsequent hands. In poker, the best players never go all in until the end of the game. In real estate, the stakes are so much higher. Know your market, and be ready to move when the time comes.
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