Optimism Around Long-Term Performance of Real Estate Seen by Most Canadians

Published March 20, 2023 by Real Estate Leads

Any suggestion that their enthusiasm for investing in real estate has waned for Canadians has been disproven with a recent report from the Mustel Institute and Sotheby’s real estate. Made available just over a week ago, it comes with results that indicate that as long as Canadians can afford to invest in real estate they will do it the majority of the time. Despite a cooled market and industry predictions that the market will continue to be be down well into 2024 at the earliest, the predominant belief is that the long-term performance of real estate as an investment asset is more than good enough to assume any risk in making those investments.

The basics of such a deduction are pretty straightforward; demands is far outstripping supply, population growth continues at record rates, and urbanization trends around the world are seen the same way as they are in other countries around the world. Do this mean investing in metro city real estate is the better choice. Absolutely it is IF that’s what you can afford to do and you can be in a position to be patient and wait out any other storms that we might not know are on the horizon. There are plenty of good reasons why new condominium development pre-sales are dominated by investment buyers in Vancouver, Toronto, Montreal, and Calgary.

This will be as good a news as any to realtors who may be light on new clientele but have a reason to believe that things will be turning around and folks looking to buy or sell homes are going to be more involved in the market than they have been since things really turned down about a year ago from now. The same piece of advice regarding that applies here too, and that is that our online real estate lead generation system here at Real Estate Leads is an excellent resource for improving you odds with finding and retaining new clients.

Let’s have a look in greater detail at this report that suggest Canadian won’t have much hesitation if any with investing in real estate.

Still Solid Investment

The report surveyed 2,000 Canadians between the ages of 18 and 77 years old in Vancouver, Calgary, Toronto and Montreal. Of them 49% feel that a home or residential real estate purchase will perform the same or better than their other financial investments in the next year. That belief goes up to 60% when looking 10 years ahead, and one in 3 urban Canadians is going to be more inclined to buy a home in the next 5 years than they would have been any time from January 2020 until now. That works out to 35% of respondents.

Another 35% of them were individuals or couples who already own a home and see themselves as more likely to sell within the next 5 years as compared to how the y felt about the same decision before the pandemic.

The age demographic group that had the most optimism about performance was the one that so many people who can’t afford homes take issue with – the Baby Boomers, who are people well into retirement and their senior years now and many of whom who have seen meteoritic gains on homes they bought 40 or more years ago for very favorable prices.

Among all metropolitan areas, just under one-third of Baby Boomers believe that real estate will outperform their financial investments in a year, For urban Canadians in general and of no specific demographic that number is 23%, so it’s not a huge difference and suggests generally that people are keen to invest in real estate and continue to be that way.

Around 60% of urban Canadians across the generations expressed their belief that they’ll see similar or even better performance from a home or residential real estate purchase in the next 10 years. Of these folks it is 35% of them who foresee it outperforming them in that time and 24% who see that investment coming back intact at the very least. The report also suggests that 44% of urbanite baby boomers are more predominantly inclined to believe that real estate will outperform their other financial investments within that same next decade. 21% believe performance will be the same.

Some More Likely to Sell

Apparently the pandemic has had the least sway on Generation X and Baby Boomers’ likelihood to buy or sell. Somewhere between 4 and 5 of every 10 of either demographic group report no change in what they see as their likelihood to buy compared to January 2020. Millennials are a different story, as over the next 5 years they are now less likely than Generation X and Baby Boomers to sell their primary home compared to pre-pandemic.

It was 32% that reported a reduced propensity to sell for this group, compared to 21 and 23% for Generation X and Baby Boomers respectively.

Overall, the role of interest rates, inflationary pressures and economic uncertainty haven’t majorly detracted from the confidence in the long-term financial performance of residential real estate. The Canadian real estate market remains an attractive asset class for investors across all generations.


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