Benjamin Bach is Canada's "Wealth Planning Guy" and a Sales Representative with The Wealth Team at Keller Williams Golden Triangle Realty. His website is http://www.kitchener-waterloo-real-estate-investments.com/. Benjamin responded to my prediction that the Canadian mortgage and housing markets were ready to crash. Rather than bury the comment in the old article, I asked him to write it as a guest author. Here it is:
"Real Estate is all LOCAL"
Parts of Canada's RE market have appreciated at *very quick* rates
in the past few years. Certain parts of Alberta have seen huge rises in
prices, and I was amongst those that thought the run up in prices was
not sustainable.
Other areas have been very flat for the last while. There are cities
where a duplex has been $80,000 for the last 10 years, and probably
will be for the next 10 as well.
Toronto, the economic centre of the country, continues to sustain
prices that, to me, seem high. Condo's for 500K are the same size as
what I buy 1hr away for $170K. BUT - ~80,000 people are moving to
Toronto a year (that stat was current as of a couple of years ago), and
they need to move somewhere. I don't think Toronto's prices will
continue to go up as much as they have in recent years, but I don't see
them going down. The high end of Toronto's condo market, specifically
new non-Name Brand condo's over $1mil (i.e. NOT Ritz, Trump etc), feels
a little more inflated by speculation to me.
That brings me to my little gem, Kitchener Waterloo. Our
economy continues to grow, unemployment and vacancy (2% !) keep going
down, and we have one of the youngest and highest paid workforces in
Canada.
The manufacturing sector has been hurt by the currency exchange, but
is still profitable. Old plants close down, but Toyota (among others)
opens new ones. Old plants - 1 million sq ft last year - get sold or
leased, absorbed back into the market.
There are three major post secondary institutions in Kitchener Waterloo, with a medical school almost completed.
We were recently voted the world's most intelligent community
We are the heart of Canada's Hi Tech sector (the Blackberry everyone loves is made in Waterloo, 5 minutes from my office)
We have a very strong FIRE sector.
A VERY diverse economic base.
When I spoke with Benjamin Tal last month, a head Real Estate
analyst in Canada, he singled out Kitchener Waterloo as the bright spot
for Real Estate investors in Ontario. I agree, and my clients do too -
voting with their wallets.
Clients from Toronto, Montreal, Vancouver, Calgary, New York,
California and recently even Kuwait are attracted to our low prices and
great economy. Condos from 130Ks (they're nice - we own a couple),
newer single detahced homes in *nice* areas from the $230,000s - and
we're less than 1 hour away from Toronto, and Pearson International
Airport.
Just like in the US, there are some areas where, to me, prices feel
high. But Canadians as a whole have not embraced the sub prime lending
that the US has seen in recent years, and *most* canadians aren't
buying huge homes they can't afford, without equity. Clearly, there are
always some who do, and independant of the economy, they'll get burned,
almost every single time.
Investors in Canada should be looking to areas where they can get a
great, reliable, steady return on their investment - Kitchener Waterloo
fits the bill in every regard, and you don't need to plunk 35% down
like most of us Canucks would have to when buying stateside.
Information is believed to be accurate but is not warranted
Thanks for the contribution, Benjamin! Your perspective is helpful.
