The short answer is:
MaybeThere are three answers, really, to the question. Each one has its valid points and it boils down to real estate market basics. There are many factors to consider, some standard, some alarming.
We are at the top of the market. Every month we’ve been there for the past 5+ years in Toronto. Prices continue to surge and keep the market moving higher. So, when you buy today, yes, you’re buying at the top of the market.
Of course, people that purchased in 2014 have seen property values jump by as much as 30% and they bought at the top of the market then.
Also, remember that real estate is about location, condition and demand. If you buy an out-of-the-way property in poor condition you will not only be purchasing at the top of the market, you may lose money over time because the demand for the property and the cost of renovations and rehabilitating it will quickly absorb any potential profits.
There are deals to be found. Whether a new home, a pre-construction unit or an older resale house, it is possible to make a property purchase below market value and see a significant return.
Again, keep in mind the location, condition and anticipated future demand of the property.
Even when property prices are high it is possible to buy below market.
If investors could perfectly see into the future, they would never lose money. On anything. Of course we live in the real world and outside influences greatly affect prices, returns and the demand of most everything. Real estate is not a liquid investment, it requires the right buyer to be ready when you are selling. That being said, you may or may not be buying at the top of the market. You may or may not realize outstanding returns on your investment.
The real answer is to find the value that makes you comfortable with your investment.
The Market Will Stay Hot Into the Foreseeable Future
#1 – The Bank of Canada will hold interest rates steady for up to the next 2 years. Low mortgage rates and cheap money will continue to allow more people into the market, keeping demand high. Even when mortgage rates start to increase, they will do so slowly, as the Bank of Canada doesn’t want to punish the Canadian economy by moving too quickly.
#2 – More people are buying than selling, keeping competition for that “dream home” tight and the supply of homes for sale lower than the past couple of year’s averages.
#3 – New home builders will continue to see a “demand-side” problem rather than a “supply-side” problem that would otherwise put downward pressure on prices.
Smart investors understand that there are many influences that drive returns, starting with the initial choice of investment.
I carefully evaluate investment opportunities before I introduce you to the best of the best. After working with dozens of builders over the past years, I understand the direction they’re going as they plan and develop the properties they bring to market.
And when there are opportunities to large to pass up, I bring them to you.