Originally Posted by Undies
buy the place to live, not to invest. if you want to invest, i say wait 3-7 years and watch the prices fall and find some prime locaitons to buy your condo as an investment.
As a capital asset, houses aren't a great long-term investment. Look at the data:
The housing bubble from 2000-2008 is an anomaly, but if you bought a house in 1970 for $25,000 it would have been worth about $125,000 in 2000.
Likewise, the stock market crashes of 2000 and 2008 resulted in poorer than normal performance over the past 10 years, but if you had invested that same $25,000 in the S&P500 in 1970 and reinvested the dividends, it would have been worth $1,500,000 in 2000.
In both cases, the real, inflation-adjusted value of the returns are less impressive than the raw numbers sound, but an investment in stocks provided over 10 times the return. The data is for the US market, but the relative performance of Canadian real estate and equities should be relatively similar.
There are differences between the two: you can't live in your stock portfolio. On the other hand, if a house is your primary residence, you can't sell it without moving to something else, and to make money, you have to move to cheaper accommodations. Also, you don't have to replace the roof on your stock portfolio or carry fire insurance on it.
Buying a rental property is a different matter, but being a landlord is a lot more complicated than being a stockholder.