That is the standard argument about real estate that does not really hold water on a full cycle basis. Yes, one has to factor in alternative rent in the overall calculation to compare apples to apples, but owning RE on a non-investment basis (not able to write off costs) does not cut it in most jurisdictions. I agree there have been periods in Toronto and Vancouver in particular where real money has been made, and in Calgary/Edmonton if one could market time correctly (like sector investing in commodities), where CAGR in RE ownership has beat capital markets, but so have there been times of great strength in capital markets.The only down side is you can't live in your ETF.
I disagree. I actually just converted some units of an ETF into Vancouver housing.The only down side is you can't live in your ETF.
If you're comparing apples to apples, then one would borrow in their stock account at the max margin to also leverage. That is certainly doable, especially with a 100K account. Year 2000 would probably have been a horrible time to do that, but if there was no margin call, the index would still have seen a double from 20yrs ago. Plus dividends and low cost of ownership. Balance that against CG exemption on primary residences vs taxable gains on a stock account.My main point is that with the house you have leverage, with the stocks, you don't. Plus, with the house, the % gain should be calculated on the outlay, the downpayment, not the total price of the home. Index funds could not beat that during those years.
I would hope your Van home, purchased for $167K in 1984 would be worth a lot more than $1.5 million, unless perhaps it was new construction. That was a fair chunk of dough back then. Must be in a decent West Side location unless it was a nice new home on the East Side.My Vancouver area Home .1984 - 167k. Today an easy sell at 1500k. 6.25 % compounded. Good or Bad? Nice, but doesn't matter I'm not moving into a strata box which runs about $1000 sq ft.
My neighbour's in their 90s, on a double lot since 1957. Probably worth lot value 2m, but so what!