Comparing Canadian Real Estate to Canadian Equities
Here's a comprehensive comparison between the Real Estate market and Equity Market Investments by our friends at RBC - Global Asset Management
"For many people, their home is their largest asset, and often considered the best investment they own. A common misconception among many investors is that, historically, real estate has been a better long term investment than equities. Looking back, however, the data suggests otherwise.
Real estate purchases are typically highly leveraged, which can magnify gains. It is not uncommon to see loan-to-value ratios of 80% or more. By contrast, equity market investments are typically not purchased with borrowed funds. Costs such as real estate commissions, land transfer taxes, and maintenance and repairs are not included in the data and would also negatively impact returns.
Here is a look at real estate price appreciation across Canada compared to Canadian equities (TSX) and dividend paying equities, in this case using the RBC Canadian Dividend fund to represent large cap dividend payers. This piece is a great tool to help clients make a more informed comparison."
The views expressed do not necessarily reflect the opinion of Argosy Securities Inc. This does not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. Please consult a professional before making an investment decision.