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Bye Buy

We bought our first home in '94 or '95 in Hamilton for $87,000? I don't have to tell you what that house is worth today, sigh.

It was a former frat-house on one of the busiest streets of the city, King Street. It was at the end of a bridge that connected the Hamilton Centre to Hamilton West/Westdale, the posh end of that Steel-town, lol.

The house was on postage stamp size lot with a shared driveway, no garden and 3 parking spots. Now, those of you from Toronto who have been gobbling-up Hamilton properties for the past 10+ years, care less about any green space and know how golden it is to have parking spaces instead, lol.

The structure itself was a 2.5 story brick building built in the 1920's. As it was used as a frat-house(read cash-cow) for it's later years, it had absolutely nothing done to it for years!

If it needed a new carpet because the students had partied too much on it, the owner simply laid a new layer of carpeting on top. I don't know how many layers of carpeting we removed from every room before we reached the old linoleum tiles of the 1930's. Old pipes, furnace, roof, old windows, no insulation,......

But we didn't care. We didn't care that we were students(well I had just dropped out). We din't care that we were purchasing that house on part-time waiter's wages. We didn't care that we had borrowed 95% of the purchase price at 7.5% interest. We didn't care that it required oh $50,000 in renovations. We didn't care that we had to exit our driveway doing 80km/h to merge the traffic coming off the bridge. We didn't care about the insane road noise or pollution complements of that traffic. We didn't care, we didn't care, we didn't care.

In fact we were happy that the interest rates were done from 20%+ of only a decade earlier and happy to not have to pay rent anymore. I used the main floor as my antique shop and rented the basement to students. Life was good....well not really, obviously.

Fights with the neighbours, 3 brake-ins(heck, they even stole our Christmas tree), having to replace the old furnace, high heating cost,...

I was a risk-taker, I still am. I'm just wired that way and I like it. The downside is that because I live in the future, my investments & ideas take decades before the general public finally embrace them and see them to fruition.

We bought and sold two more properties in Hamilton before we made our first attempt to escape our horrible Ontario lives in 2005. Btw, our last house in Hamilton was just listed for $600,000. It was the smallest house in the entire neighbourhood. Not the entire street but the entire neighbourhood!

Our property in New Brunswick is our sixth property in three provinces since 1995. And in all of that time, I have only witnessed one, maybe two "buyer's markets".

There are a few reasons for that. I grew-up in the inner cities of Hamilton. Is that an oxymoron or redundant? lol

So I lived amongst other immigrants from Italy, Portugal, India, Vietnam, middle east, Greece, the eastern block,....

There were all buying properties, first to live in and then to rent-out. Absolutely all of them!

They couldn't believe that they could finally buy a house of their own after not having been able to afford such a luxury back in their own countries.

Fast forward and the boomers have been buying properties for their kids for the 20 years now.

The point of this post is that with the exception of a market crash & another hiccup, Canada's real estate market has been a seller's market for at least the past 30 years that I have been following it for.

BUT, I would say that starting 2020, for the first time ever, I am seeing both a buyer's AND a seller's market simultaneously!

Allow me to explain.

Seller's market because there still seems to be more buyers than sellers. But another previously/historically quiet market is awakening like a dragon from a 1000 year sleep. This sleeping giant is rural Canada, land, Atlantic and in particular New Brunswick.

Not only folks from Germany, the U.S, China & other well-to-do countries are seeing value in this last affordable, safe, underpopulated, resource-rich, polite, clean and up & coming frontier, Canada's very own citizens exhausted by super-inflated, over-priced & unaffordable city prices of anywhere Canada are rethinking what makes more financial sense.

Now add to that the fact that they can now work from home(thanks covid), all the stresses that come with populated city lives, back-to-landers AND now prepares, a segment that has previously not existed in Canada, and you get a perfect storm for the awakening of the former sleeping rural real estate market.

Ok so that all explains why we're having a seller's market but why do I also call this a buyer's market? Well because today's buyers to some great degree, believe that a financial collapse of unseen proportion is imminent and that where we borrowed $80,000 for our first home, they have to borrow upwards of $500,000 today, for the same house! Even at 1% interest rate, that is an insane amount of money that will not bring return on investment + those mortgages will outlast the houses.

So if these folks are ready to walk away from their $500,000+ mortgages or believe that there will be no banks to reposes or governments to govern, it's easy to borrow whatever amount, since it will be written-off or void anyway. This brings me to my final point that the buyer's markets are mostly in the cities where the seller's will soon have to lower their asking prices because folks are moving away from the cities. The buyers know that no matter how high the country/rural properties are predicted to go, they can go even higher.

Here are some of the more obvious & undeniable facts.

If we are to feed 8 billion people AND their pets, we are going to require a country with lots of land and little population. The corporate/giant farms know this and are on the hunt for retiring farmers so that they can gobble-up their land.

There seems to be so much civil unrest + high cost of living/real estate in other first-world countries.

In China, the Chinese citizens cannot own property. It's all state owned. So there isn't just a shortage of space or bad air quality.

The Canadian currency is relatively low compared to the Euro, Pond Sterling, the U.S dollar...

No foreign ownership restriction on real estate in Canada that I know of.

Again, these are just some of the facts for why Canada, and in particular New Brunswick is a bargain. It's simply because there aren't too many other option out there.

Now all you need is about 5% of the global population to believe that some sort of world economic collapse, or apocalypse or whatever is soon to hit the world and the rural Canadian population would skyrocket.

The speculation by the super-wealthy that are looking to diversify their portfolios alone would move the market higher.

My prediction is that as people from around the globe look to secure their safety, food security, community,... they will abandon their city live for a more sustainable life.

As always, if you require guidance & advice with choosing your rural property, the renewables or how to best get situated, I'm here to help.


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