Expert Advice and Outstanding Results!
September 3rd, 2010 
Liz Stevenson John Stevenson
Sales Representatives
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Is buying a home a GOOD INVESTMENT?

The chart below shows average Single Family Home Prices over the past 50 years.

Looking back allows some remarkable observations:

  • The average Single Family Home has increased from $14,424 in 1953 to over $379,000 in 2008. That is an average of about 6.12% compounded annually, TAX FREE for most owners! 
  • In the past, there has only been one major "correction" to house prices over the past 50 years. Many will recall the "heady" late 80's when house prices escalated at extraordinary rates, until the bubble finally burst in 1991/1992.  This correction was largely attributable to inflated prices being caused by widespread speculation by both domestic and foreign investors, without regard for sound underlying economic considerations.
  • From 1996 until the end of 2008, house prices had increased annually at a 5.56% compound rate driven by solid demand for housing due to the strong economy largely stimulated by low interest rates and steady immigration into the GTA and less by the previous wreckless speculative demand. 
  • The January 2009 Royal LePage Real Estate Report states the current 2008/2009 economic slump has resulted in a yearly average Toronto housing market price increase of only .8% in 2008 and forecasts a 4% decline in prices for 2009. 
  • Royal LePage said in a January 2009 release that "emotional reaction to recent economic and political instability" led to a sharp drop in the market in late 2008, but that "a more rational understanding of the issues" should lead to some recovery in the latter part of 2009.
  • Many believe this decline is relatively transient and provides an opportunity to take advantage of current market conditions to buy, and enhance their long-term equity growth.
  • Demand for housing should continue, due in part to a steady rate of immigration into the GTA (about 75,000 + annually) and continuing favorable interest rates. Canada also remains one of the more stable and attractive places for foreign investment.
  Single Family House Prices - Since 1953
For most buyers, a home still represents a sound investment in their future as it is functional, providing shelter, is free of tax on capital gains, and should continue to provide a very favourable and LONG TERM growth with strong underlying security.

If you are renting, or considering moving up, let us show you how a relatively small downpayment investment can, through the process of LEVERAGE, allow you to enjoy a long term return on your investment which can be as much as 20 - 35% per year, TAX FREE, for many home owners. Take advantage of today's attractive interest rates to leverage your money while enjoying home ownership.  

John Stevenson, P.ENG., M.B.A      
February 2009
Direct 416.233.8657
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