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Have you noticed the doom and gloom that is all over the media’s coverage of real estate? Kevin O’Leary, one of the stars of ABC’s Shark Tank, recently blasted the Canadian real estate market on air, calling it a bad investment to purchase a home.
One of the reasons he stated for his distrust of real estate is an 8-12% cost for buying or selling a property. The first reason this statement isn’t quite accurate for us is that, here in Alberta, we do not have land transfer fees. When you’re going to sell your property, are there commissions? Is it going to cost you money? Obviously, yes, there are certain costs involved with selling real estate anywhere in the world. As a buyer, however, you do not have to pay your real estate broker when you find a home -- that is always on the selling side of the transaction.
Obviously, to say that it is expensive to buy or sell real estate in Canada is a bit of an overstatement. In the same interview, O’Leary predicted that the real estate market is going to be flat in the next five years and that it’s going to be difficult to gain any positive appreciation. According to research I’ve done on median pricing and average pricing in Calgary since 2008, we’ve seen an increase in median single-family home price of 18%! The average price of single-family homes increased by 20% in the same period of time! Obviously, the evidence seems to show that home values are not only appreciating, but doing so at a high clip.
