The equity you build in your principle residence is tax free.(In Canada) Most of the wealth created over time is created by owning your own home. The sooner you own a home the quicker you will become financially independent. Renting will keep you poor. These are all time proven facts.
Today many people are confused because there is so much negativity night after night being broadcast on the news. For example housing sales dropped 27% in the USA in the month of July compared to last year. Supposedly the single biggest drop in history. Canada after seeming to being immune to this recession is now seeing housing sales plummet across the country. Has real estate now become like the stock market ? An investment avenue many people would be wise to avoid ? I would say avoiding the only investment where your return is tax free would be a mistake.
No one would argue that these are uncertain economic times. The whole world is in a state of flux and change is the common denominator. Society is changing that is a fact. Stability is now a rarity in every day life. Technology is changing the work place, how we interact and how things are done. Immerging economies are challenging once dominant countries for superiority in the world market place. Global warming and changing weather patterns are creating chaos around the world. We all have friends who are pessimists and are thriving on all the negativity. It is important to not be overwhelmed by it all and to maintain our focus on improving our financial well being . We do this by adhering to tried and true investment principles one of which is home ownership. Here are some things to consider about real estate. Real estate is local . Figures quoted on the news are usually National in scope. Actually having absolutely no relevance to your local real estate market. Every one needs to live somewhere . Real estate(The Land) cannot be manufactured . They are not making any more real estate. As in any commodity the real estate market is affected by supply and demand. The changes the Canadian government made to the lending requirements have effectively removed 50% of eligible home buyers from the market place so of course that has had a negative impact on home sales.
I have a saying. “ The money is made in the buying”. I can see increased listing inventories and great buying opportunities ahead in many local markets. The best time to buy a home is in a buyers market. (Circumstances favor the buyers) . Motivated home seller’s are going to be more negotiable.
Prices are going to soften and there will be some great deals. Remember you are buying a home. So what if the market remains soft for a few years. Over time the real estate market will recover. You will have capitalized on a unique buying opportunity and have substantially increased your net worth by the tax free appreciation in your principle residence. In closing let me repeat the most important fact you need to know about owning real estate.
The equity you build in your principle residence is TAX FREE. My recommendation. Buy a home and prosper.
Larry Matthews
Sept 4th 2010 http://www.easthants.com/realestate http://www.larrymatthews.com
http://www.yourfirsthome.ws http://www.hantsfinancial.ca
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