While Canada may not be the country foremost on the lips of those looking at the worldwide real estate market there is no doubt that the country has performed very well since the 2008 U.S.-led mortgage crash. Indeed a report by Christies International Real Estate reveals that Toronto is the only one of the top 10 luxury real estate markets in the world to have moved ahead during 2014. The term “luxury real estate” relates to the number of properties selling for in excess of $1 million.
Even though the Canadian authorities continue to discuss ways in which to control the Canadian real estate market it seems that international investors are more than willing to put their money where their mouths are.
It is no coincidence that the Canadian authorities were the first to address budget deficits in light of the 2008 real estate crash. Indeed in many ways the UK authorities tried to emulate the success of the Canadian government although it is proving more difficult. For those who have not followed the Canadian real estate market, this is an area which continues to go from strength to strength due to the underlying economic performance.
As soon as it became apparent that the worldwide economy was in trouble and deficits were emerging around the world the Canadian authorities began talking to the electorate. Yes, politicians were actually talking to the electorate to see where they believed cuts could be made without excessive impact upon everyday life and business. This led to the creation of a very strong bond between the government of the day and the electorate mimicking David Cameron’s “we are all in this together” comment.
While the rest of the developed world battle to maintain any forward momentum with their economies we have seen significant movement in currency markets. Indeed the weak Canadian dollar has fed the buying frenzy among luxury real estate offering better value the lower the currency drops against its competitors. So, you have a strong economy, buoyant real estate market and currency considerations which are attracting many overseas investors. What next?
Regulating the market
The last couple of years have seen some significant movement with regards to regulating the Canadian real estate market which in some areas was seen as “out of control”. As complaints against realtors began to grow the government came under more and more pressure to act. It got to a point where the authorities were forced into action and while some of the changes have not gone down too well within the industry they have been introduced to protect investors. This added confidence across the Canadian real estate market can only help with its reputation overseas and is likely to attract even more investors in the longer term.
While there is a favourable currency situation for overseas investors, a buoyant real estate market and improved regulation of the sector, it is perhaps the early action to address the deficit in the aftermath of the 2008 worldwide economic crash which is behind this strength. This is a country very often overshadowed by its US “cousin” but if you take a look at the Canadian real estate market in isolation there are many positives you can take away.