So you think the stock market was bad

Feb 22, 2019 | Phil Knight


So you think the stock market was bad

It’s been a while since I looked at everyone’s favourite topic of conversation, that of Vancouver real estate. You should all know by now that the North American stock markets declined anywhere from 6-12% last year, with most of the decline occurring in the month of December. As of today those losses have pretty much all been recovered. For those of you that stayed the course, your portfolio has now likely surpassed the December 1st levels. And has very likely paid you a healthy dividend (income) along the way.

So how does this compare to your real estate Investment?

If we look at a couple of examples we can see the bath that some people have taken.

4213 West 14th Avenue, Vancouver

Bought in 2016 for $2.88 million, recently sold for $1.98 million. A loss of $900,000 or around 31%.

875 Greenwood Road, West Vancouver

Bought in 2016 for $3.3 million, recently sold for $2.88 million. A loss of $420,000 or around 13%. And this down from an assessed value in 2017 of $3.896 million.

5830 Sperling Avenue, Burnaby

Bought in 2016 for $2.8 million, just sold for $2.114 million. A loss of about $700,000 or around 25%

2235 West 21st Street, Vancouver

Bought in 2016 for $3.92 million. Recently listed at $3.18 million. A potential loss of $740,000 or around 19%

And for the vast majority of us that still have a mortgage this has been more painful still, as unlike our investment portfolios, which are paying us a dividend, our real estate holdings are costing us money in the form of a monthly mortgage payment.

Yes we have to have somewhere to live, and yes our house in a long term investment. But so is our investment portfolio. So don’t calculate the value of your investment portfolio on a daily basis any more than you would value your house on a daily basis. It is a completely fruitless exercise. Rather view them both as assets that should grow over time, and hopefully provide you with a financial secure retirement.

Please note that the RRSP deadline is March 1. If you are making your contribution via online please ensure you do so by Feb 27th to ensure your contribution is processed in time.

February 22nd 2019

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