Life is about timing, and in real estate investment, timing is crucial as well.

How can you get the timing right?

I believe that in both life and real estate, patience and consistent effort create the right timing. Opportunities constantly present themselves to everyone, but only those who are prepared can sense and seize them.

For those who want to buy real estate today but feel the prices might drop, and for those who regret buying when real estate was at its peak, I want to share a graph that might be helpful.

Below is a graph depicting the changes in real estate prices in Greater Vancouver over the past 43 years. Although the graph starts from 1977, focusing on the price fluctuations over the last 20 years should be sufficient.

“Seeing is believing,” isn’t it? While there have been short-term fluctuations in prices, looking at it in 5-year intervals, you can observe that regardless of when and at what point you bought, the price recovered within 5 years and often exceeded the previous peak.

Looking at it over a 10-year span, the average price in 2000 was $656,776, and 10 years later in 2010, it rose to $933,676, a $276,900 increase (42%). Assuming a 75% loan when purchasing a house with only 25% personal investment, this results in a 270% return.

In 2010, the average price of $933,676 rose to $1,747,209 in 2020, a $1,046,952 increase (87%). Similarly, assuming a 75% loan and 25% personal investment, this yields a 450% return.

I believe you can clearly see the leverage effect, one of the significant advantages of real estate investment. In my previous column titled ‘Real Estate Investment is the Best’ in July, I explained the appeal of real estate investment, so referring to that might be helpful.

Having a long-term perspective and holding onto real estate can provide much more stability and better returns compared to other investment options, a point I have consistently emphasized. Therefore, in reality, more important than timing when purchasing real estate are factors like location, position, and building specifications.

If you have any questions or would like consultation, please feel free to contact me at 604-961-0898 or ac.eeLecinuEobfsctd@ecinuE.