No Bubble in Canada

Myth: The Canadian Real Estate Market is in a Bubble that’s About to Burst

We hear this comment often, and every time we hear it, we have to make a big effort not to start laughing.

Our reaction then is usually to ask the person making this statement the following question:

“What do you think the Canadian weather will be like tomorrow?”

To which they’ll reply something like “What do you mean ‘Canadian weather’? There is no such a thing. You’d have to be a bit more specific if you…”

And then their face lights up when they realize the silliness of the statement about “The Canadian Real Estate Market”.

There is NO Canadian Real Estate Market.

First, when the newspapers use those words, they are usually referring to Vancouver, Calgary and Toronto. That’s pretty much it!

That’s because those three cities together account for 52% of the real estate market in Canada, so it is normal; for the journalists working in those cities to think that what is happening in their backyard is representative of the rest of the country.

Hogwash!

Do you really think that the condo prices in the GTA are affecting in anyway the prices of the single family homes in Gander NL, or North Battleford SK, or Whitehorse YT?

There is NO Canadian Real Estate Market! That’s a myth!

In fact, there is no Alberta Real Estate Market either, or British Columbia Real Estate Market, or Quebec Real Estate Market.

Just like there is no Alberta weather, or British Columbia weather, or Quebec weather.

Let’s take Ontario for example, since this is where we live. There is no Ontario Real Estate Market, obviously, but there is also no GTA Real Estate Market, there is no Durham Real Estate Market, or even Oshawa Real Estate Market.

Because the real estate market in North Oshawa is not the same as that in South Oshawa.

And if we studied North Oshawa for example, we are certain that there are smaller areas where the appreciation over the last 5 to 10 years is different from the surrounding areas in North Oshawa.

When highway 407 is finally extended to the end at highway 35-115, it will affect in a big way the prices of the houses in the immediate area (eg Brooklin, Solina, Hampton, Kirby, etc), it will affect somewhat the houses further away from the new road (eg Port Darlington, Newcastle, Bowmanville, etc), maybe not so much the houses in Peterborough, and obviously not the houses in Sudbury.

So please get this once and for all: There is NO Canadian Real Estate Market! And the next time you read about that in the papers or hear someone say that…try very hard not to laugh out loud…and ask them with a straight face what they think the Canadian weather will be like the next day…

What this means is that in order to be a savvy investor, you need to stop reading what is reported about the Canadian Real Estate Market in the Vancouver Sun or the National Post, and you have to start doing your due diligence locally, in the area where you are thinking of investing…and not too big an area.

Or talk to experienced realtors who specialize in the area you are interested in. They’ll know!