Canadian Media Promotes Housing Market Downfall In Spite of Facts
It’s long been rumoured that media publications such as the New York Times write obituaries of famous people before their deaths in order to be the first in line to report the news once the sad event arrives. But recent obituaries penned for the Canadian real estate market seemed to have been mistakenly published, even while leading experts and economists continue to point towards evidence of slow and steady market growth for most of Canada.
“Canada’s Housing Crash Begins” screams the headline from an article in the latest issue of Canadian Business Magazine. The only interpretation is that the writer of the headline now believes that there is an imminent Canadian housing crash. This strongly (wrongly) worded headline marks a continuation of the Canadian media capitalizing upon a period of weakness in the housing market to spark further crises.
Now, few would argue that the goal of the media is to create panic in the market. But this panic common knock-on effect of these types of headlines. Imagine a young couple looking to buy their first home. They’ve researched the market and they have a sufficient enough down payment to comfortably purchase their ideal property. Walking past a newsstand they notice a headline in large, bolded font that reads “Canada’s Housing Crash Begins.” The headline would give even though most confident homebuyer pause for thought. So in a market that thrives upon young people and new immigrants to Canada realizing their dream of home ownership, this lack of foresight from specific elements within the Canadian media has the potential to eradicate upward momentum in the market and actively prevent thousands from making the proactive decision to purchase property in the country. Therefore depriving them of what most homeowners will say was the best investment decision they ever made.
My one question to those editors at the major media corporations who create headlines such as these is this: “Are you selling your property?” You would have to be a moron to completely believe that the housing market is going to crash and that values are going to plummet and yet still hold on to your property. If the media experts creating these headlines are not going to sell their property and are simply utilizing this admittedly creative use of language to sell magazines and newspapers, then it is completely irresponsible on their part.
Indeed, despite the recent slowdown in the market, experts on the whole remain positive on the future direction of Canadian real estate:
“Although revised downward, national sales in 2012 and 2013 are forecast to remain roughly on par with the 10 year average, with 2012 coming in slightly above and 2013 slightly below average.”
Wayne Moen, CREA president
Between 2000 and 2011, Canadian home prices doubled. The fact that this incredible asset value increase had given way to a slight moderation in prices in 2012 should be a surprise to nobody. But the fact is that prices will continue to rise within the market over the longer term. And in fact, this year has seen manylocal area real estate markets perform beyond expectations in terms of growth. When you take a closer look at areas such as Barrie and Hamilton as an example, you’ll find that these two cities have experienced superb growth in terms of real estate value in 2012. And the same can be said of smaller towns and cities across Canada. While values in the Vancouver real estate market have stagnated in 2012, buyers of Canadian Business Magazine across many other parts of Canada have seen values of their real estate continue to rise. Real estate is regional and cannot be looked at nationally when making a decision to buy or sell. It is imperative to understand your chosen market and understand the fundamentals that drive that market. Values do not react the same in all markets at the same time or pace. While some markets may experience softening, others could thrive.
Real estate has never been a short-term solution for those looking for quick returns on their investment. Few investors would look to short-term figures over the previous few months or predicted data for the next few quarters as a way to measure their potential return on a real estate asset. Unfortunately, this is a mindset that few in the media can truly grasp. While tomorrow the headlines will have changed and a new subject of scorn will be found, the Canadian real estate market will continue to be a solid area of investment as it has been for decades in the past and as it will be for decades in the future.