Remember back to 2008 when residents in Florida, Arizona and California were complaining about the influx of Canadians buying up properties in their markets as a result of the distressed value of American real estate?
Well, what goes around, comes around. Let’s see who’s buying Canadian real estate.
Canadians have recently watched the decline in the valuation of their dollar, in large part due to Canada’s dependence on oil and commodities, along with a weak manufacturing sector.
The Canadian dollar, as of the writing of this article, was valued at approximately 70 cents U.S., with the potential for more downward movement. The price of oil on the international market just slipped below $27 per barrel. As a result of the Canadian dollar decline, Americans are starting to see some attractive real estate opportunities north of the border.
Even with the global economy in the doldrums, the vibrant, multi-cultural international cities of Toronto and Vancouver continue to defy pundits who are not able to understand how these real estate markets continue to fire on all eight cylinders.
In Toronto, alone over 100,000 newcomers will call Toronto their home each year, and this number is expected to continue unabated for the next 25 years. With Lake Ontario to the south and the Green Belt to the north, much of the building in Toronto is occurring vertically through new condominium developments.
Barbara Lawlor, president and CEO of Baker Real Estate, the leading sales and marketing firm handling approximately 25 percent of all new condominium projects launched in Toronto said, “Based on the immigration and migration patterns, we need to add over 30,000 doors each year — just to ensure we keep up with the market demand.”
Lawlor also said, “This demand should translate into continual appreciation for anyone looking to invest and buy a condominium in the Greater Toronto market. We are seeing more activity from our neighbors to the south especially as a result of the state of our dollar.”
Chris Kapches, CEO of Chestnut Park, and the Christie’s International affiliate in Ontario stated, “Our beautiful Muskoka cottage country has long served as a holiday destination for many of Hollywood’s famous actors and professional athletes. With the low Canadian dollar, we are already starting to see more interest from Americans that have always wanted to own vacation properties or just own a piece of Canada.”
The Asian market, specifically the mainland Chinese, discovered Vancouver as a destination to invest, educate their children and raise their families. Even though Greater Vancouver remains their favorite destination, the lower dollar is now empowering some Chinese buyers to look beyond British Columbia and look to other provinces for their investment needs.
For the first time, many Americans are planning to explore Canada as part of their vacation plans. According to Fortune Magazine, Canada is a great destination if you are looking for stunning mountain peaks, cosmopolitan cities and great skiing in the winter, and amazing lakes and sunsets in the summer.
With the New York Times, ranking Toronto as No. 7 on their 2016 vacation list, a vacation to Canada might very well inspire you to learn more about the emerging real estate opportunities to the north.
A recent survey conducted by the U.S. News & World Report, the University of Pennsylvania’s Wharton School and BAV Consulting, ranks nations by looking at 75 factors such as sustainability, adventure, cultural influence, entrepreneurship and economic influence, ranked Canada number No. 2 on their list.
When you take into account the low crime rate, stable government, universal health care system, stable banking industry, strong educational system, proximity to the U.S. and the current state of the currency, it’s time for Americans to return the favor on the international real estate buying front.
Don Kottick is the executive vice president of corporate development for Peerage Realty Partners, the parent company for Chestnut Park Real Estate and Baker Real Estate based in Toronto.