{"id":292,"date":"2017-02-22T20:55:22","date_gmt":"2017-02-22T20:55:22","guid":{"rendered":"https:\/\/www.realestateleads.ca\/blog\/?p=292"},"modified":"2023-09-27T14:56:03","modified_gmt":"2023-09-27T14:56:03","slug":"the-less-conspicuous-driving-force-behind-soaring-home-prices","status":"publish","type":"post","link":"https:\/\/www.realestateleads.ca\/blog\/the-less-conspicuous-driving-force-behind-soaring-home-prices\/","title":{"rendered":"The Less-Conspicuous Driving Force Behind Soaring Home Prices"},"content":{"rendered":"
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\"3D<\/a>A very interesting article in the thetyee.ca<\/a> today by journalist Geoff Dembicki entitled \u2018The Real Reason You Can\u2019t Afford A Home\u2019 highlights a specific aspect of the new global economic realities that is manifesting itself in many people no longer being able to afford a home in hot spots like Vancouver and Toronto. There\u2019s much in the way of real estate trends and news these days, but it\u2019s hard to argue this isn\u2019t easily at the forefront of them.<\/p>\n

To introduce it in a more-simplistic overview, it\u2019s that the amount of global capital becoming available for investing is rising much more rapidly than actual<\/em> economic growth. Here now in 2017, there\u2019s so much capital available that investors don\u2019t know what to do with it all.<\/p>\n

The response has been to pour a large portion of it into real estate, and not just here in Canada but in popular metropolitan city areas all around the world. It\u2019s considered a \u2018safe\u2019 investment given the current climate, and prices are becoming sky-high as a result as the impetus for the investment shifts to a much more speculative one.<\/p>\n

The 2 Distinct Spheres<\/strong><\/h3>\n

To understand this in a more brief and easily digestible piece, we need to look at why there is both \u2018real\u2019 and \u2018financial\u2019 economies, and how distinct they are from each other as it relates here. The \u201creal economy\u201d – as Dembicki puts it – is what most of us are familiar with, all the goods and services produced across the world \u2014 the global GDP \u2014 and the infrastructure that makes this activity possible.<\/p>\n

The \u201cfinancial economy\u201d is something different altogether. This is where investment happens. Securities, mutual funds and bonds, along with the balance sheets of banks and other financial institutions. With all this talk about a \u2018bubble\u2019 for real estate in Vancouver and Toronto, it\u2019s the financial economy that\u2019s blowing the air into it.<\/p>\n

The article states – very correctly – that digital technology and globalization are the 2 primary contributors to the rise of this investment boom and all that comes along with it, good and bad. Digital technology has allowed investors to create more sophisticated and profitable ways of investing, while globalization led to massive amounts of new wealth in countries that never had much of it before.<\/p>\n

The volume of this newfound ready-to-go capital is enormous, and it\u2019s entirely natural that investors have begun looking for new opportunities. The simple fact is real estate<\/a> is the one of the best avenues for investing now, and so here we are with super-inflated markets in our big cities.<\/p>\n

A Persistent Market<\/strong><\/h3>\n

It\u2019s true that corrections always tend to occur with big-stage global economic trends, and this will likely be no exception. The \u2018invisible hand\u2019 always shows up, but the reality is that this trend of \u2018unaffordable\u2019 homes is likely here to stay for a good long while. And it should be said that there are plenty of very \u2018liveable\u2019 cities in Canada outside of Vancouver, Toronto, and Calgary!<\/p>\n","protected":false},"excerpt":{"rendered":"

  A very interesting article in the thetyee.ca today by journalist Geoff Dembicki entitled \u2018The Real Reason You Can\u2019t Afford A Home\u2019 highlights a specific aspect of the new global economic realities that is manifesting itself in many people no longer being able to afford a home in hot spots like Vancouver and Toronto. There\u2019s […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[76,43,75,56],"class_list":["post-292","post","type-post","status-publish","format-standard","hentry","category-general-topics","tag-real","tag-real-estate","tag-real-estate-market","tag-real-estate-prospecting"],"yoast_head":"\nThe Less-Conspicuous Driving Force Behind Soaring Home Prices - Real Estate Leads Blog<\/title>\n<meta name=\"description\" content=\"The Less-Conspicuous Driving Force Behind Soaring Home Prices - Real Estate Leads Blog\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.realestateleads.ca\/blog\/the-less-conspicuous-driving-force-behind-soaring-home-prices\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Less-Conspicuous Driving Force Behind Soaring Home Prices - 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