Understanding House Prices

Q.1. What factors affect house prices?

The value of a house in Canada is affected by a number of factors including location, the condition of the home and property, the need for renovations, demand for real estate and the state of the economy. As well, new environmental and health regulations can result in major expenses to older houses.

Q.2. What is my home worth today?

You can start to determine the value of your home by checking what comparable homes in your area are selling for. This information is readily available for any type of home, in every urban or rural region of the country. In addition, you can utilize the services of a real estate firm that will usually do a free home assessment but remember the focus of a real estate agent is to sell property. As well there are appraisers who usually charge a fee to assess the value of your home.

Q.3. Is a home a good investment?

It’s usually best to think of your house primarily as a place to live and secondarily as an investment. That said, while there are no guarantees, investing in real estate generally tends to be profitable over time. Certainly there are periods of time when values in Canada drop as a result of economic conditions but, in the long run, real estate tends to appreciate in value. Real estate should be only one of your forms of investment. Depending on where you live, you may see dramatic fluctuations in home prices, or you may experience long periods of time where prices are very stable.

Q.4. How does buying a home compare with other forms of investing?

There are many ways in which home ownership differs from other forms of investing: you will pay different kinds of costs you may find it difficult to get your money out; many factors will affect what you make. Remember, you are not just investing, you are also likely borrowing (a mortgage or home equity line of credit) to purchase the property.