I would like to take a minute and reflect back upon the growth of our real estate market, and the public sentiments towards the market. A friend sent me this article which I found very interesting, as this was published in August of 2005. I can remember back to the half-empties chanting that the market was going to collapse, and that the growth could not continue, and that all the real estate market was all hype. Well looking back I have to laugh at these nay sayers, and revel in the fact that my clients have been making steady 15% year over year since 2005. I can't agree more with the tenets of this article.

Looking at our current condition, and the current nay sayers concerns about the US markets influencing Canada, I once again hope we all dig a little deeper and see the cup for half full, as it really is. Our Toronto market is a strong and growing market for the following reasons:

1) Low interest rates - cheap to borrow money
2) Affordability still good ratio to our incomes
3) Low unemployment, and large job creation
4) Millions of immigrants entering per year need housing
5) Growing recognition of Toronto as a world-class city (as witnessed by Ritz Carlton, Shangri-La, Four Seasons, Trump coming to town)
6) Excitement around new cutting edge, modern developments in previously unaccessible neighbourhoods - condo/lofts in particular

Key Points From the article below:

Nothing you will ever do in your lifetime is likely to make you as much money as buying a home and living in it.

Realistically, the best investment you will ever make will be your home.
Don't worry about timing the market in real estate. It's time in the market that will matter for you.

I'm confident and excited, and happy that I'm helping people build their fortunes and security for later in life. Enjoy the article and stay tuned for more.

How buying a house can make you rich

Nothing you will ever do in your lifetime is likely to make you as much money as buying a home and living in it, writes David Bach in The Automatic Millionaire Homeowner.


Over the last few years, something radical happened to the way Canadians think about money and investing - something so radical that it may have forever changed the way we live our lives and plan for our futures. What happened is that a lot of people got fed up with the stock market.

The reason for this change of heart was simple. Between August 2000 and September 2002, Canadian stocks experienced their worst decline since the Depression in 1929-1932. After a bull market that began in 1998, Canadian stocks lost 43% of their value between the summer of 2000 and the Fall of 2002. To say the least, it was one brutal meltdown. Even though the Canadian stock market in general and technology stocks in particular bounced back by 2004, the effects of the meltdown linger to this day.

For many families - maybe yours was one of them - this market "correction" (which is what the experts called it) was the proverbial straw that broke the camel's back. Canadians simply decided that enough was enough. They were taking their stock market "chips" and going home - literally and figuratively.

Instead of keeping their money in stocks, many Canadians started investing in real estate - mainly in homes, home improvements, and second homes. This simple change has led to a boom in real estate and home ownership the likes of which we've seldom seen before. It's an exciting time to be building wealth in Canada, but it's also a frightening time because Canadians now have so much of their wealth tied up in their homes-about $1.6 trillion in equity, according to Statistics Canada, or about 77% of non-financial assets. According to a report from Scotiabank, the value of real estate assets in Canada rose by 27% between 2002 and 2005, more than double the 13% increase in household financial assets. Home equity now accounts for 36% of the average net worth of homeowner households in Canada, up from 29% in 2000.

And many people are wondering - maybe you're one of them - whether this is a safe place to be.

Between 1997 and 2005, the average Canadian homeowner saw the value of his house jump by almost 50%. Since 1980, according to The Canadian Real Estatxe Association, the average Canadian home has increased in value by more than 200%. Many homeowners doubled or even tripled their wealth in just a few years because of exploding real-estate values. As prices soared, experts began warning that the real estate market was starting to look like the overheated technology market of the late 1990s. Nonetheless, as I write, the gold rush to real estate continues.

The average home price in Canada hit $237,900 in 2005 - up $15,000 from $224,729 the year before. Not as high as increases in the U.S., but that was just the average. In some markets, including Edmonton and Calgary, home prices have risen more than 8% in the same period. In Vancouver, the average price of a house is $400,000. Some people have literally bought a home, lived in it for a few years, then sold it and retired. Done. Game over.

Imagine that. Buy a home, live in it, build your wealth-and then retire rich. It may sound too good to be true. But it's not. It has happened - and it will continue to happen for thousands of people over the next few decades. The question is, will it happen for you? Will you catch this wave, miss it - or will it crash on you?


As I sit here in August of 2005, I have no idea when you will actually be reading what I'm writing. Maybe it's March of 2006 (when this book is scheduled to be published) - by which time the real estate market could be slowing or cooling down to more modest annual gains (or not). Perhaps this book was bought by a friend of yours who passed it along to you - and it's now 2007 and those once "certain" boom markets are going bust because of speculation. Or maybe the opposite has happened-interest rates have remained at historic lows and home prices have continued their march upwards.

In fact, it doesn't really matter when you happen to be reading this or what's going on right now in the markets. This book is not about the boom . . . or the busts. It's not about timing the real estate market. It's not about the fantasy of "getting rich overnight" in real estate.

What this book is about is the truth. And the truth is this:

Nothing you will ever do in your lifetime is likely to make you as much money as buying a home and living in it.

Realistically, the best investment you will ever make will be your home.
Don't worry about timing the market in real estate. It's time in the market that will matter for you.

Learn more about The Automatic Millionaire by David Bach.

Buy the book.

Excerpted from The Automatic Millionaire Homeowner, Canadian Edition by David Bach Copyright (c) 2006 by David Bach. Excerpted by permission of Doubleday Canada, a division of Random House of Canada Limited. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.

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