With the real estate market in a period of adjustment and interest rates stabilized, many Canadians are asking: is real estate still a good investment compared to stocks, bonds, and GICs?
Real Estate: The Case For
- Leverage: You can control a $800,000 asset with $160,000 down (5:1 leverage), amplifying returns
- Principal residence exemption: Tax-free gains on your home — no equivalent exists for stocks
- Rental income: Cash-flowing properties provide monthly income
- Inflation hedge: Real estate values and rents tend to rise with inflation over time
- Tangible asset: You can live in it, improving quality of life while building equity
Real Estate: The Case Against (in 2026)
- High carrying costs: Mortgage interest, property taxes, insurance, maintenance, and condo fees eat into returns
- Illiquidity: Selling takes months, not seconds
- Concentration risk: Most of your net worth tied to one asset in one location
- Market correction: Prices are down from peaks, with further decline possible in the condo segment
Alternative Investments in 2026
GICs: 3.5% - 4.5%
With rates stabilized, GICs offer predictable, guaranteed returns — attractive for conservative investors.
Canadian Equities (TSX): Long-term average 7-9%
Stocks offer higher potential returns with higher volatility. Fully liquid and easily diversified.
Government Bonds: 3.0% - 3.8%
Safe haven with modest returns. Bond prices may rise if rates eventually decline.
REITs: 4-6% yield + growth
Real Estate Investment Trusts offer exposure to real estate with liquidity of stocks and steady dividend income.
The Bottom Line
Real estate remains the foundation of most Canadians' wealth-building strategy, and the principal residence exemption alone makes homeownership one of the most tax-efficient investments available. However, diversification matters — don't put every dollar into property at the expense of a balanced portfolio.
For a personalized analysis of your home-buying affordability, use our mortgage calculator or talk to our team.