With recent stock market swings and a noticeable dip in housing prices, many investors are asking, “Which is the better investment—real estate or stocks?”. It’s a fair question, especially in uncertain times.

Real estate has long been seen as one of the most dependable ways to build long-term wealth in Canada. It’s a physical asset with the potential for consistent appreciation, rental income, and the unique advantage of leverage—allowing you to grow your portfolio faster with borrowed capital.

But how does real estate really compare to the stock market? And what should today’s investors keep in mind when deciding where to focus their efforts? As both a financial advisor and a mortgage broker, I keep a close eye on market trends and investment performance. Here’s what you need to know to make informed, strategic decisions about your next move.

Real Estate Is Still A Strong Long Term Investment

Property has been a popular investment for many centuries, starting with farmland and growing to include development and rentals. Historically, real estate has been a strong investment. Between 1990 and 2023, the national average home price in Canada climbed from $120,200 to $827,100. That’s an average annual growth rate of 6.3%.

• 1990–2007: Real estate boomed with 8.5% average annual growth, driven by population growth and lower interest rates.
• 2008–2023: Even during economic uncertainty, prices kept growing, 4.8% annually, showing real estate’s resilience.
• 2023–2025: There’s been a modest dip, with CREA reporting a 2.5% decrease in the average home price in Toronto between March 2023 and March 2025.That’s a normal part of the cycle and not necessarily a red flag for long-term investors.

Temporary slowdowns create buying opportunities, especially for investors who are in it for the long haul and know how to work the numbers with the help of a knowledgeable mortgage broker or financial advisor.

Real Estate Or Stocks – Which Shows A Better Return

Over the long run, the TSX has performed well, averaging about 7.9% in annual returns over the last 34 years—this includes dividends, which are often a big part of the overall profit. Stocks also have the advantage of being quicker and easier to buy or sell compared to real estate.

But even though the returns might look impressive, the stock market can be unpredictable. Take the 2008 financial crisis, for example—during that time, the TSX lost nearly 40% of its value. More recently, on March 10, 2025, the S&P 500 saw a sharp drop of 8.6% in just one day, wiping out more than $4 trillion in value since its peak in February.

Real estate, by comparison, is usually more stable. It doesn’t swing up and down as wildly as stocks, especially in areas where demand for property is strong and prices tend to rise steadily.

For investors who want to build wealth without dealing with the daily ups and downs of the stock market, real estate can be a more reliable option. Plus, it allows you to use leverage, meaning you can make a relatively small investment upfront and still benefit from the full value of the property—boosting your potential returns over time..

REITs – Real Estate Investing Without the Hassle

Not every investor wants to manage tenants or properties firsthand. That’s where Real Estate Investment Trusts (REITs) come into play. These are companies that own and operate income-producing properties, and investors can buy shares in them through the stock market—essentially combining the benefits of real estate and liquidity.

REITs offer exposure to commercial and residential real estate without the time commitment of managing buildings. Most pay consistent dividends and can help diversify a portfolio, especially if you’re looking to stay in the real estate space without taking on new properties directly.

That said, REITs still carry some of the ups and downs of the stock market. You don’t get the same control that comes with owning property outright, and you may be committed for a specific time. Still, they can be a smart addition to a diversified investment strategy — especially with guidance from a financial advisor.

Why Real Estate Is Still A Solid Investment

Even with recent changes in the market, real estate is still one of the best ways to build long-term wealth. It allows you to grow your equity, earn rental income, and protect your money from inflation—all while owning something real and valuable that typically increases in worth over time.

One big advantage of real estate is the ability to use leverage. With a mortgage, you can buy a large property with a relatively small amount of your own money, which can really boost your returns as the property grows in value. Stocks might be easier to buy and sell and could offer higher short-term gains, but they don’t give you the same level of control—or the peace of mind that comes from owning a physical asset.

Working with a mortgage broker can make a big difference, too. A broker keeps an eye on market trends and interest rate changes, helping you find the best mortgage options available. They can guide you through financing choices and ensure you’re getting the most value from your investment.

Working With a Financial Advisor And Mortgage Broker, Like Me, Can Help You Build A Strong Portfolio of Real Estate Or Stocks

Whether you’re focused on growing a rental portfolio, exploring commercial investments, or dipping into REITs, your strategy will benefit from expert support. As a mortgage broker, I can help you structure financing that works for your investment goals, and as a financial advisor, I can ensure your portfolio stays balanced.

At the end of the day, investing isn’t just about chasing the highest possible return—it’s about building something sustainable and aligned with your long-term vision. Let’s sit down and look at your goals so we can put together the best plan for you. Book a free consultation or call 705-315-0516 to get started today.