Vancouver Real Estate Market Trend:
In its most recent statistics release, the Real Estate Board of Greater Vancouver reports that residential property sales in Greater Vancouver declined 69.7% in November 2008 to 874 from the 2,883 sales recored in November 2007. Comparing to October 2008, sales volume dropped another 35%.
I've heard lots of people, especially those in their golden years, complain about how much they have lost in their mutual funds. They thought one way of saving money is by putting their money in their mutual funds account. As long as they don't sell it, they will have their retirement money growing. The stock market used to be a good investment tool for people who don't have the down payment to invest in real estate. However, in my opinion, the nature of the stock market has changed from an investment tool to a casino pool. Look at the Madoff's 50 billion dollar scam of the century. A well respected investment advisor who used to be the chairman of the Nasdaq, stunned all the international financial experts with this fraud which is like a pyramid scheme where each new investors pays for the interest of the previous investors. The disaster ripples from Japan to Switzerland.
Where can we put our hard working money these days? Not because this is a real estate show and that's why I ask the listener to invest in real estate, I just personally prefer to invest in real assets. Why would you buy a revenue property now when you feel the market is not going anywhere fast? Here are the reasons:
1) Interest rates keep going down. We hardly get any interest by putting money in the bank. Banks are heavily advertising the tax free interest account, however, the amount limited to $5000 per year. If you take out portion of the money from the account, you cannot put money back within the same year, or else it will be considered as an over contribution.
2) You will get a greater return investing in real estate by either paying down your mortgage or having a tenant pay off your mortgage. I'll discuss this in our first show next year.
3) Low Vacancy rate: Since the peak in 2007 with all the mutliple offers, house prices have seen a significant drop and is at, or approaching its intrinsic property value which I spoke of in the past. CMHC's 2008 Fall Rental Market Survey found the vacancy rate is now at 0.5% this year compared to 0.7% last year, making it harder to find rental accommodation, good for the investor. In 2008, the average rent for a 2 BR apt in BC has jumped 5.3% compared to 2007.
3) Low Vacancy rate: Since the peak in 2007 with all the mutliple offers, house prices have seen a significant drop and is at, or approaching its intrinsic property value which I spoke of in the past. CMHC's 2008 Fall Rental Market Survey found the vacancy rate is now at 0.5% this year compared to 0.7% last year, making it harder to find rental accommodation, good for the investor. In 2008, the average rent for a 2 BR apt in BC has jumped 5.3% compared to 2007.
Trends are changing on a daily to weekly basis and it is my goal to keep you informed so that you can make a wise decision in your financial planning.
