With equity markets settling down following last weeks’ commotion, I’m turning the focus to Canada’s housing markets and their climb down from their lofty perch. The article in today’s Globe & Mail compares 2017 and 2018 year-over-year price increases, drawing attention to the dramatic difference in gains between then and now.
The good news? Housing prices are still going up (which is bad news for those looking to get into the housing market). But we are seeing a return to sanity, and reflects the higher costs of borrowing and changes in Canada-wide-mortgage-qualification rules.
Real Estate has been among the best performing asset classes over the past 10 years. A return to lower returns is not only expected, it’s healthy. Investors need to have a general idea as to how asset classes will perform and we expect all classes (including fixed-income and equities) to see an overall return to their long term historical averages.
So what does this mean? Short term money is best served through the safety of short-term bond funds. Medium term money though global balanced funds and long term money through global equity funds. Be patient, be diversified and set realistic goals for your hard-earned savings. We’ll look after the rest!
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