Q: In a recent answer you stated "while we might not be too excited about the outlook for real estate". Could you please expand on your thoughts. In addition to a diversified stock portfolio I hold considerable investments in rental income properties - multi-residential and commercial in the Kitchener/Waterloo area. At 69yo I'm considering going more conservative like increasing my GIC holdings.
5i Research Answer:
Real estate is impacted by jobs, population, rates, supply & demand, and the economy. Right now, job growth is weak. Canada is seeing a population decline. The economy is not great (GDP negative). Interest rates were set to fall, and now with inflation fears they may not, or could even rise. In most markets supply has increased. We are not calling for a disaster in the sector, but we doubt it will be the steady gains that we have seen in the past 20 years. Conservative investors should remember that the sector can indeed decline (as it has in the past year).
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