The Bank of Canada, and most central banks in the developed world, inflates currency by 2% a year, and naturally they are not successful at keeping it that low, as we have always seen over a long term period. This is good news for residential real estate investors, especially those who use leverage to buy their investments. With only an increase of less than 3%, 2.82% compounded yearly, the value of a piece of real estate will double in 25 years. Incidentally, in the 15 years from September 1998 to August 2013, the Canadian cities tracked by Teranet have increased more than four times in value. Victoria 229%, Vancouver 249%, Calgary, since March 1999, 247%, Edmonton, since March 1999, 279%, Winnipeg 298%, Hamilton 216% Toronto 226%, Ottawa 228%, Montreal 261%, Quebec City 283% and Halifax 220%. See: http://www.housepriceindex.ca/
By David Franklin from The Real Estate Investment Network
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