Canadian Real Estate Market Interpretation Inquiry

[Connor Ferguson]

Hello fellow BP users, especially those fellows investing in Canada. It's been a crazy year in the real estate market as someone looking in from the outside. Congratulations if you have enjoyed some of the national average of 30% appreciation (from March 2020 to March 2021 according to the CREA) on any of your real estate investments. How are you interpreting this market, what types of REI have you found success in? What are your predictions for the future, and where would you consider investing capital now?

Kindly,
An eager investor

[Chris Baxter]

I don't know if 'enjoy' is the right word... While my properties have appreciated, access to deals with sound fundamentals has completely evaporated. In the MF realm, cap rates are being driven down (even in secondary markets). Investors continue to (IMHO) overpay for properties as they throw cheap money at properties for FOMO.  I'm considering taking advantage of this trend by selling some of my holdings to someone that has more capital than common sense.

Where to invest now????

1) Buy a business that suffered during COVID but has sound non-pandemic fundamentals

2) Buy in markets where cap rates still make sense (i.e. not Canada)

Investing for the hope of appreciation is not an investing strategy, its gambling.