Investors: Canada or the U.S., it all depends

The Canadian Real Estate Investor Forum concluded with “The Great Debate” – a panel discussion tackling the thorny issue of whether investors should keep investing in Canada or expand their portfolios into international markets.

 

Moderated by Phillip DuMoulin, host of HGTV’s Urban Suburban, the panel included Chris Clothier of Memphis Invest, Don Campbell, president of REIN, Mike Wolf of US Property.ca and REIN VP of sales and marketing Russell Westcott.

The discussion opened with the thorniest question of all: Which offers the better investment? the U.S. or Canada?

“The border is just an imaginary line,” said Wolf. “Do your due diligence wherever you invest.”

Westcott agreed that there are good investments in both countries, as long as investors don’t get lured by low prices alone.

“It’s like buying a car,” he said. “Without the fundamentals, you’re buying a lemon.”

On the topic of whether the U.S. will soon be facing a housing shortage and what that might mean, Clothier opined that typically, it means stabilization of the market, but that might not be the case everywhere.

“Not all markets will stabilize and some already have,” he told the audience.

Continued low interest rates in both countries were another issue discussed by the panel and not everyone agreed that, that lower barrier to entry is a good thing.

“I think interest rates should go up,” Westcott said with a straight face, “because I’m losing good tenants who can now buy homes.”

The panel’s attention then turned north of the border as they pondered whether large Canadian housing markets, such as Toronto and Vancouver, may soon face a price correction.

“Condos are overbuilt in Toronto, but not Vancouver,” said Campbell. “But prices won’t drop because they’ve already been set.”

With foreclosures still quite large in the U.S., the panel was asked whether this presents an opportunity or a liability for investors.

“It’s just a number for potential investments,” said Wolf. “But price is not the most important part. What you’re buying is a business in a box.”

Clothier concurred, but added, “Once they’re gone, prices will go up.” He also had some advice for investors who focus on price: “Price is what you pay, value is what you get.”

 

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