The Current Situation of Real Estate in Canada

toronto-2428518_1920.jpg

Real estate has always been perceived as safe and a potential way to make money for many investors. Perhaps that is why many foreign investors, particularly Chinese, see Canada’s real estate industry attractive despite the high prices and government regulations. The proof is in the increased home prices in Vancouver and Toronto in recent years.

However, since Ontario put in place a fifteen percent tax on home purchases by foreigners this April (Non-Resident Speculation Tax), the percentage of foreign buyers in Toronto fell from 7.2 to 5.6 percent. In general, the number of new listings has fallen and so have home sales. Vancouver implemented the same tax last year and went through some sort of similar accommodation.

Foreigners will continue to turn to Canada due to the state of vagueness in the US and also the UK. Canada acts as a good alternative especially due to its diplomatic and stable economy. In a recent report from expats community, the political climate of the US and UK has led to a significant drop in their ranking.

In contrast, a further appreciation of the loonie might be a driving force to put off new foreign capital flooding. For instance, the US dollar experienced more than a 10% depreciation when it traded at C$1.23 on average in September 2017, as opposed to C$1.42 in January 2016.

Source: Toronto Real Estate Board, Ontario Ministry of Finance, Real Estate Board of Great Vancouver, InterNations, Bank of Canada

Disclaimer: This newsletter is not engaged in rendering tax, accounting, or other professional advice through this publication. No statement in this issue is to be construed as a recommendation to buy or sell any security or other investment. Please do your own due diligence before making any investment decision. Some information presented in this publication has been obtained from third-party sources considered to be reliable. Sources are not required to make representations as to the accuracy of the information, however, and consequently the publisher cannot guarantee accuracy.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s