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What's the better investment: Real estate or stocks?

‘For Sale’ sign is pictured in the front yard of a house in Toronto, Ontario, Canada, July 17, 2018. Picture taken July 17, 2018. REUTERS/Carlo Allegri

There’s a common perception among Canadians that real estate is the safest investment out there. New mortgage rules and provincial policies might have some rethinking that philosophy.

Canada’s hottest housing markets cooled in 2018, but the impact was not nearly as dramatic as the chill that came over stock markets.

Zoocasa crunched the numbers to compare the return on investment between key real estate markets and other investment vehicles.

If you shopped around — a high-interest savings account would have provided 1.1 per cent in interest. A fund tracking the S&P Canada Aggregate Bond Index, like XBB.TO from iShares, returned a modest 1.5 per cent. But a fund tracking the TSX, like XIC, would have resulted in a loss of 11.6 per cent.

A home in the Greater Toronto Area outperformed them all. The average price rose 2.1 per cent to $750,180.

Source: Zoocasa

Buying a home in Vancouver didn’t pay off in 2018. The average price fell 1.7 per cent, to a still lofty $1,032,400.

Source: Zoocasa

Calgary was relatively flat, down 0.9 per cent to $449,361.

Source: Zoocasa

These numbers represent a small snapshot during a down year for equities. But for 2018, buying a home in the GTA, Vancouver, or Calgary would’ve been a better investment than the broad basket of Canadian stocks.

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