Quote:
Originally Posted by Hondaracer
history would say it's safer to assume growth rather than decline imo.
Especially if you're buying relatively desirable places in Burnaby/Vancouver, imo the market is there for you to make money on a home regardless of the situation. a "correction" isnt going to mean that all of a sudden these incredibly sought after homes all of a sudden become unsellable. People will -always- want to live in these areas, and pay a premium for them
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Do you have any relatives who bought in the peak on the late 80s? I'm sure they don't agree with that, at least not when they realized they lost a a huge amount of equity during the 90s.
During the 90s, real estate purchases were done mostly on necessity; the natural requirement to have a shelter. However, they didn't buy RE with the assumption that it would grow, but rather, it made sense purchasing vs. buying given their financial situation.
If you can afford a place in this market, by all mean go ahead as long as it doesn't alter your long term financial goal too much and you simply see the mortgage payment as cost of shelter.
However, if you are thinking housing as your major investment/component in your portfolio, I'd suggest to think again. Historically speaking, RE has grown at the same/similar rate of inflation. Many that I know buy house because it forces them to save and they don't invest in much else but a regular RRSP or similar retirement scheme. I find that ridiculous... but their long term plan is much simpler, so I can't argue.
As far as investment goes, cashflow is still the most important aspect, or at least that's what I learned from my parents. So whenever I'm borrowing for an investment, all that matter is the cashflow that such investment brings me after debt service. So I know I would be enjoying an even better cashflow once the loan has been paid. To put it into perspective, my parents were once about 11M in debt.
... but their cashflow brought down the debt so fast that 12yrs later, they are debt free and making more in a month than what I make in a year.
But cashflow in the current GVR market?
