The current real estate market is turning out to be a real treat for investors. It was always on the card that once the negative effects of the COVID-19 pandemic start to subside. Every economic sector will bounce back. And this is the case with real estate too.
Especially the prices of luxury penthouses and huge mansions see a dramatic rise. They are the ones first to bite the dust. But for the time being, it looks like everything that you will touch in real estate will turn to gold.
Let me offer you some deep insights into the recent developments in the US real estate market. What it means for its neighboring Canadian market.
A Sudden Surge
According to the latest report published in CNN on 19th June 2021. The real estate market in the US is turning out to be hotter than fire.
There are several factors for this, but one thing is for sure; the current market has suddenly escalated. And according to some industry analysts, it is soon going to be over the top.
Already there is news of investors offering up to 1 million dollars more for people holding prime estates. And this is making everything related to real estate going north. As the frenzy is not looking to go down any time soon.
The role of the Fed is adding fuel to the fire. It’s only Because they are buying almost 40 billion dollars worth of mortgage bonds/month.
The prices are rising astronomically, and at the fastest pace on record, so everything looks rosy at the moment.
But based on our experience, we all know that this bubble will also burst within a few months. However, if not earlier. And that is where the investors need to be wary of this act. Especially small investors looking to make some quick money.
Let me define what all this means for the Canadian real estate market. And for the big cities like Toronto and Vancouver, where real estate prices are much more volatile.
Outlook for the Canadian Real Estate Market
Just like the US real estate market. Canadians also need to be aware that too much rise in the price may lead to an eventual burst.
The Canadian market is not as used as the US market. Therefore, with just two cities, namely New York and Los Angeles.
They offer more real estate investment opportunities than the entire Canadian market. The population is one factor, but real estate and big cities like NYC and LA are famous worldwide. Investors do not think twice before lapping on an opportunity.
Surging inflation, just like us, will eventually hurt the people, and their buying power will be reduced. But for real estate, this is good news as it will add more fuel to the already rampant real estate market. Much like all the other sectors, a dramatic and astronomical rise will always see the downfall. And that’s why investors coming in to get their share of the pie of the red-hot real estate market need to be very conscious. Especially those investors who will put their money in the market in the coming few weeks where the disaster is likely to happen.
With the disaster just around the corner, do not think that the real estate market in Canada will fall sharply. It is just that the bubble is bound to be burst, and that is why I want you to be conscious. If you want to invest in the Canadian real estate market right now, your best bet would be in a condo or a similar small investment under 1 million dollars. Anything over this amount, you will lose more money, so all investors need to be vigilant.
I am sure that some of my readers would like to ask a question concerning the current astronomical rise in real estate prices. And if some of you like to share their experience with all of the others, it will be great. For any feedback too, please use the comments section below.