How can you ensure your timing is right in both life and real estate investments? I believe that practicing patience and consistently putting in effort are key factors in creating favorable timing. Opportunities arise frequently, but it is those who are prepared and attentive that can recognize and seize them.
For those who wish to purchase real estate today but have concerns about potential price drops, as well as for those who regret buying at the peak of the market, I’d like to present a helpful graph. The graph illustrates the fluctuations in real estate prices in Greater Vancouver over the past 43 years. While it begins in 1977, focusing on the price changes from the last two decades will provide relevant insights.
Do you agree that “seeing is believing”? When examining real estate prices in 5-year intervals, it becomes evident that regardless of the timing of purchase, prices not only recovered within 5 years but often surpassed previous peaks.
For instance, considering a 10-year span from 2000 to 2010, the average price in 2000 was $656,776. By 2010, it had risen to $933,676, indicating a significant increase of $276,900 (42%). Assuming a 75% loan with only 25% personal investment, this translates to a 270% return.
Furthermore, in 2010, the average price of $933,676 climbed to $1,747,209 in 2020, demonstrating an increase of $1,046,952 (87%). With the same financing assumption, this represents a 450% return.
This data clearly showcases the leverage effect, which is one of the notable advantages in real estate investment. I previously elaborated on the appeal of real estate investment in my July column titled “Real Estate Investment is the Best,” so referring to that may provide further insights.
It is important to adopt a long-term perspective and hold onto real estate, as it can provide greater stability and superior returns compared to other investment options – a point I have consistently emphasized. Thus, in reality, factors such as location, position, and building specifications hold more significance than the precise timing of purchasing real estate.