Buying Property in Canada

Why Buy Property in Canada

The Real Estate Market in Canada

A strong Western Canada job market and economy, will help keep new home starts up over 200,000 units during 2006 and probably into 2007.

The key factors influencing the property market in Canada from the point of view of the property investor are:

• Slightly rising interest rates (Canada wide)
• Significant increases in building materials over recent months
• Hot housing markets fueling higher home prices
• A strong Western Canada economy and high job demands
• A positive and negative net migration

Existing Home Sales in Canada

Existing home purchases also continue to be strong across Canada and especially in the western provinces with over 400,000 home sales in Canada during 2006 and it is expected that this level will continue through 2007.

Analyzing what's going on in the Canadian housing market is never a simple thing; out migration factors in Eastern Canada continue to play a key role into what banks and consumers are doing, and continue to benefit the western provinces. New home construction in Alberta and British Columbia will continue to be strong, even after 2006.

Newfoundland and Labrador, and possibly other eastern provinces, should continue to experience a negative net migration at least into 2007, while Alberta and British Columbia will enjoy a positive net migration. Where there is a consistent increase in new residents there will also be a healthy demand for new and existing homes.

Positive Numbers for Canada

According to the Canada Mortgage and Housing Corporation (CMHC), all provinces will continue to enjoy a healthy number of new home starts and existing home sales in 2006 and into 2007, the only province expected to actually increase new home constructions in 2007 is Manitoba.

Provincial population will influence these numbers and is the main reason why Prince Edward Island's 2007 new home construction forecast is a modest 750 units and Ontario's new home construction forecast is over 65,000 units.

For the investor?

As in every overseas property market it is always location, location, location. In Canada you have on one hand the fall in the number of new builds, and the continued rise in property purchases, on the other you have the differing pressures caused by migration in the in the western and eastern areas.

The real estate market in Canada is strong and has seen significant growth and positive development since 2000. The levels of growth in property in Canada have slowed down since the start of 2004 but are not expected to decline significantly.

As the general wealth and GDP of Canada’s citizens has grown, the property market in Canada has grown proportionally as well. The real estate market is supported by rising personal income, higher levels of affordability and people’s desire to own rather than rent - add to this the fact that the global stock markets have failed to produce expected returns in recent years and that the risks associated with investing in financial instruments are significantly higher than risks associated with property investment, and you can see why the house buying market in Canada is big business and the Canadian real estate market is so strong.

If you are considering purchasing you will find that the system is really very straightforward and unsurprisngly shares most of the same fundamental aspects that both the US and UK systems employ for example.

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