Five years ago, I decided not to buy a home in Toronto. “Clearly” a bubble in the market was about to pop and I didn’t want to be the fool who failed to time the market. After all, the crash was inevitable. Article after article by learned economists after learned economist pointed to logical reasons for the inevitable crash: high debt-to-income ratio, cheap financing for anyone who had a pulse, an economy overly dependent on real estate, a shaky local, national and international political atmosphere.

Only recently have I come to terms with the fact that I was the fool who tried to time the market.

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A study of investors between 1926 and 2011 conducted by Charles Schwab Company confirmed that a 20-year holding period never produced a negative result. Not so if you were an investor who tried to time the market. While this research was conducted with respect to stock markets, the same holds true for real estate. There is no get-rich-quick scheme.

What’s more, those who’ve successfully pulled off quick flips and “no money down” real estate investments often misattribute their success to their approach or brilliance and ignore the much stronger factor playing into their success: plain dumb luck. Taking advice from these people is akin taking advice from a lotto winner: “Quit your job and buy lotto tickets – it works!”

Study after study shows that the best way to avoid falling prey to irrational and detrimental investing behaviour is to take the long-term approach. Regardless of whether the market is overheated today or crashing tomorrow, the market – 10 or 20 years from now – will go up. Some markets will take longer and others shorter. This is true of Toronto’s market.

Many buyers in Toronto are still holding off on purchasing – as I did – in order to “wait and see” (read: “wait for the bubble to burst and be the genius who made a killing!”). This strategy, on its surface, seems logical. Who doesn’t want a deal?

It’s logical, however, only until you look at the research: waiting for the perfect time will cost you. As Charles Schwab’s study showed, “the cost of waiting for the perfect moment to invest exceeds the benefit of even perfect timing.”

Accordingly, if you are able to cover your mortgage comfortably, if you’ve saved for the inevitable problems that come with any form of ownership and if you plan to hold for at least 10 years, then it’s the right time to buy in Toronto. This is true no matter what the market is doing.

This perspective, however, doesn’t come without some caveats. For example, where you buy is important. I also wouldn’t buy property that has soil contamination issues and I certainly wouldn’t buy anything I couldn’t afford or wouldn’t be easily rentable. With this in mind, you still can make money in Toronto’s market. The critical point to remember, however, is that overnight success takes a minimum of 15 years.


  1. Great article. Love the line “overnight success takes a minimum of 15 years” Those on the side lines always think they know best but are never willing to take action.

  2. Great article.
    Except we haven’t had the bubble pop since the 80’s. So this article is perfect for now. But what about a year from now? We don’t know how bad it can get. If house prices and condos drop downwards of 50 percent…..would your 20 year statistic still work? How much money would you save over a 25 year mortgage then versus the current price? And how many people who bought into real estate 5 years ago would be able to afford their place?

    2008 the bubble popped in the US. In many states they still haven’t begun to recover. 1989 the Bubble popped in Toronto and it took 17 years to return to those numbers(not including that those numbers were no longer the same value as inflation had taken its toll).

    I will wait and see. There’s no logic to the prices Im seeing in my city(12 largest) in BC, which has had no economic growth besides housing. And who’s citizens can’t afford their house without a basement suite and low interest rates. And who’s Province has a 25 percent GDP based solely on Real Estate(7 percent construction, 18 percent Real Estate(lawyers, realtors, Mortgage agents, insurance agents speculators, landlords etc)). When housings beings to drop in the slightest, an avalanche of pain will start…

  3. Ok. But living in Northern Ohio… ahem I mean Southern Ontario.. what is a deal exactly? Our side-cities around Toronto have median home prices over $500K with household incomes around $80K. Is $600K a deal on a fixer upper anywhere? How about $500K? In most places in the world it is worth $200K at best. And here it offers you, the citizen, absolutely no more utility than elsewhere. Southern Ontario is not rich and its not any better than anywhere in the USA – and certainly not as nice as the wealthy places in the US. It has a bad climate and seasons. It’s flat. Architecture is poor. It’s not beautiful geographically speaking, it’s just ok. You’re stuck in a suburb working for the same wage as anywhere. Deal? The better deal would to have not been born here, so I wouldn’t have to be considering leaving family behind to start some place else just because they pump so many people into the city yet have so much taxes and regulations on new homes the price of housing skyrockets. New home prices use to be less than existing. Today, new home prices are what are leading to rapid price increases in the market. It’s upsetting to see that our economy is so lousy, and we are so communist in nature, that we accept this market. In 2005, Ontario could build houses. Cheap ones. Fast. Then the Liberals came in. Now we are headed towards poverty and being a english speaking citizen of Canada, your citizenship, if you do not own a home, is a liability, not a privilege. It just means high taxes.

    • WOW, you surely are not a happy camper. I moved to THIS country because I saw the opportunities I would never had back home. May I suggest you check what country is good for you ? Obviously Canada isn’t a good fit for you, Then again, I should know not to take people to seriously when they are writing under a pseudonym. People who hide their real identity probably have something to hide.


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