So far 2008 has been very kind to Canada’s property market. A Place in the Sun Live recently reported that Canada had recorded the biggest jump in its league table for most popular overseas property destinations, moving up seven places on last year to ninth spot this year. Then, a global report on British Expats by NatWest International Personal Banking rated Canada as number one for its quality of life experience. Whilst the USA wobbles, Canada is positively blooming.
Lakeside properties in Canada are helping to push up prices in a market that is not yet affected by the gloom across the border in the US . European investors, helped by a strong Canadian dollar, are buying second homes, many of them to rent to holidaymakers.
'Affluent Americans unaffected by the recession and Europeans looking for more remote luxury destinations are buying second homes in Canada,' according to Knight Frank real estate.
Places like Victoria on Vancouver Island and Chester, Nova Scotia are flourishing. Ski resorts are also popular.
In the greater Vancouver area, for example, purchases of homes costing 2 million Canadian dollars and up rose 50% in 2007 according to a report released by RE/MAX of Western Canada. In Kelowna, purchases of homes at this price rose 64% in the same time period.
However Elton Ash, executive vice president with RE/MAX Western Canada, says troubles across the border are bound to affect Canada's property market within the next year. 'Canadian buyers, many of whom work for companies based in the United States, will begin to act more frugally. The two economies are too closely related for there to be no Canadian downturn whatsoever. But luxury real estate will remain insulated from any woes,' he predicted.
Canada is the only established market in the world where the property market is semi-emerged and thus ripe for growth, it is claimed.
The potential for property investors has been overlooked according to Liam Bailey of David Stanley Redfern.
'I would call Canada, the only established market in the world, where the property market is only semi-emerged; meaning there is room for emerging market level growth on carefully chosen Canadian property,' he said.
He cites the Rouge River developments as an excellent example where one acre land plots are available for £28,000, in an area where £50-£100,000 is more typical for land plots of such a size.
A three bedroom chalet on the same development is going for £150,000 with others a short way away are selling similar properties for £500,000.
'Even on the developments with much higher prices, properties are being snapped up because of the excellent location. Almost smack bang centre between Montreal and Mt Tremblant, means you can attract rentals from tourists and visitors being drawn in by both places,' he added.
The outdoor life is particularly attractive in Canada. Developers are emphasizing things like rivers and lakes, kayaking, bicycle trails and ski-ing in the winter.
The economy in Canada is benefiting from growing tourist numbers, according to figures from Scotia Economics. International tourist arrivals in the country have risen by almost half in the last eight years.
'In Canada, tourism spending accounts for 4.6 per cent of gross domestic product and the sector is also responsible for more than 650,000 jobs,' said Adrienne Warren, senior economist at Scotiabank.
Even relatively remote areas such as Saskatoon, known as the Paris of the Prairies, are reporting increases in property prices but it is an area largely being ignored by developers.
According to the Canadian Mortgage and Housing Corp. there is huge demand for high end rental property and this trend makes sense economically for developers. The capital city, Regina, is considered one of the world's biggest agricultural biotechnology centres and it has the University of Saskatchewan and the Innovation Place Research Park and a considerable percentage of high-paying jobs.
'There is a steady influx of students and high income workers to let property to as well as a number of international companies. The economic stability of the region is relatively well assured,' said Paul Caton, an analyst with the firm.
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