Wednesday 20 March 2013

Back To 1985


Ah, to remember 1985. It is impossible to look back on the mid eighties without a twinge of nostalgia for some, or ironic amusement for others.

1985 gave us Marty McFly and his time-travelling Delorean.

Going back to 1985, we had New Coke, neon clothes, and Wayne Gretzky smashing every NHL record.

1985 gave us the chart-topping Careless Whispers (without which we wouldn't have the Sexy Sax Man today).

1985 was the year Bryan Adams broke. And new wave. It was a time when Hudson Bay mannikins sported colourful mohawks, officially announcing the end of the punk rock movement.

In Vancouver, on March 21st, 1985, almost 18 years ago today, Rick Hansen set out on his quest to circumnavigate the world by wheelchair. 26 months later he would return, his mission a success.

The current Cambie Bridge was opened. The Skytrain too. An Expo was looming, and the city was excited.

But what is really so special about 1985?

According to the Bank of Canada's Inflation Calculator, prices have doubled since June, 1985.

In 1985.5, one dollar had the buying power of exactly two dollars today.

Going back to 1985 makes for an easy benchmark of comparison.

If you could join Marty McFly in his Delorean, you could make some easy money reselling O'Henry bars for a 75 cent profit, doubling their value.

Or better yet, you could buy an ounce of gold for $426, and that would be worth $1650 today, almost four times its value.

However, there would be no better investment than Vancouver real estate.

In 1985, the average price of a condo was roughly $150,000. A detached home, a mere $170,000 or so. Today the same home would cost well over $1 million.

If you could go back in time, to 1985, you would stand to grow your investment 6 to 7 times over, buying the right property. There are few stocks out there that can give you that kind of return. And weathering, and even thriving after, the economic collapse in 2008, Vancouver real estate has proved itself to be a sure winner.

Doing the math, even if the cost of living has doubled in Vancouver, a piece of real estate has brought in profits three to four times that. That's pure profit.

Time goes by faster the older you get. There are many Vancouverites who can probably remember their first trip on the Expo Line like it was yesterday. It will be the same for you one day. While the cost of living continues on its march, your hair will grey and your family will grow and your salary will reflect your experience. Every year, you will wish you bought in sooner.

Interest rates are at an all-time low. Evan has homes for under $300,000. With Marty McFly as our guide, they could very well be worth six times that, in another short 18 years.


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