A Guide to Investment Property Canada

The Canadian property market has been experiencing a significant boom in terms of growth and activity recently as increasing numbers of people discover the beauty, diversity and immigrant friendly nature of this particular North American country – it’s fair to say that Canada currently offers a lot of potential for property investors.

With a stable government, a strong economy and lots of tourism potential for example, Canada is an older, well established and understood market that’s experiencing a new day in the property investment spotlight. Below are 10 of the principal reasons contributing to Canada’s growing property market at present.

1. A Stable Government in Canada Inspires Investor Confidence in the Property Market

Canada enjoys a constitutional monarchy headed up by the British monarch; it has a democratically elected government, a house of commons and a senate, is led by a prime minister and runs in much the same manner as government within the UK for example.

The familiarity of the political system and its stability both lend themselves to giving investors confidence in the nation and of course in the ability of the government to manage a strong Canadian real estate market.

2. Canada’s Excellent Economic Stability is Highly Attractive for Real Estate Investors

Canada’s economy is robust and growing. The Canadian dollar is experiencing a lead over the American dollar and the country’s GDP was GBP 693 billion in 2006. The annual growth rate is 3.8%, outpacing inflation which runs at 2.3% and unemployment figures are moderate at 6.1% with a labour force that is estimated at 16.5 million. The Canadian economy is driven by automotive parts manufacturing, high-tech products, natural gas, oil, tourism and forest and farm material manufacture and export.

The strength of the Canadian economy and its recent rapid growth thanks to the production and processing of its natural fuel reserves has given property investors reason to take sit up and take note of the potential offered in Canada currently.

3. The Exchange Rate Currently Makes Canadian Property Very Attractive

The current rate of exchange between the Canadian dollar and the British pound for example is roughly two for one which means British currency spends extremely well giving British property investors a strong buying advantage. Although the Canadian economic situation is driving the country’s dollar above the American, it has not kept pace with the pound which again makes Canada one of the most interesting markets for Brits seeking to make intelligent investment purchases at this time.

4. Ease of Entry and Immigration in Canada Represents Broader Market Appeal for Property Investors

Travel and entry into Canada is generally straightforward for British and European citizens making it a popular longer haul choice for holidaymakers. Additionally, immigration into Canada is a relatively easy process generally initiated from the mother country and because Canada has a very strong pro-immigrant and tourism stance this makes the country very attractive to investors who want the ability to stay with their properties, visit them frequently and have the broadest base of potential interest in rental or purchase from which to generate an income or realise an exit strategy.

5. Large and Dynamic Expatriate Community Brings New Cash Flows to Canada’s Real Estate Market Annually

Canada enjoys many large expatriate communities which grow, develop and are dynamically active annually meaning that every year there is a certain percentage of new cash flow into Canada’s real estate market.

With Canada having long been a favourite for the British for example, so British property investors are able to position their assets according to their fellow citizens’ likely demands and requirements and this is an investment approach chosen by many. US investors often take the same approach and target their own Canadian real estate investments at fellow American arrivals.

6. Familiar Laws, Culture and Canadian Property Purchase Process Makes for a Comfortable Transition

Beyond the government’s open welcoming of new immigrants and foreign investors, Britons in particular will find a lot in common with the Canadian people as well as familiarity in the government, legal system and overall property purchase and registration processes. And aside from in Quebec where French is the national language, visitors, expatriates and investors find fitting in and doing business through the medium of English is very easy.

Basically, because the transition involves fewer culture shocks and hurdles in the business and investment climate than investors elsewhere often experience, Canada has an evergreen appeal among international buyers and property investors.

7. A Growing Tourism Industry a Popular Driver for a Canadian Real Estate Investment Approach

Canada’s attraction as an international tourism destination is on the rise. According to the Canadian Tourism Commission, trips from residents of countries other than America rose by 3.8% in the first six months of 2007 alone with the total number of non-US originating trips into Canada reached the 2.6 million mark during the first few months of the year. This is a trend that has been ongoing for several years and is set to continue according to the World Travel and Tourism Council.

As Canada continues to actively and successfully market its vacation potential to the rest of the world, these numbers will rise and the country’s natural draws make it a favourite destination for everything from eco tourism to winter sports, from hunting to historic and cultural sightseeing tours – for a property investor this means there is an increasing and broadly diverse base of market appeal to target which quite simply translates into profitable opportunity.

8. Geographic Diversity Makes Canada Attractive and the Canadian Property Market of Broad Appeal

Canada is an extremely large country with a diversity of geography; covering 9,984,670 million sq km the country’s landscape includes Niagara Falls, the Canadian Rocky Mountains, lots of coastal land along both the Pacific and Atlantic oceans and plenty of wide-open space. Buyers here will find everything from rustic fishing villages to metropolitan living in Quebec, Vancouver and Toronto for example and quite simply, the diversity represents massive potential for property investors because no matter what their preferred property type or investment approach, they can find a pocket of Canada that offers them opportunity.

9. Attractive Cost of Living Entices Expatriates, Retirees and therefore Property Investors to Canada

Although there are many reports of Canada’s high tax rates, the reality is the cost of living is not high for many who herald originally from Britain or mainland Europe. Additionally, with the near 2-for-1 exchange rate many Britons in particular find living, buying and investing in Canada is more than affordable. The buying power here is therefore not only very attractive for investors as discussed, it is also of appeal to those seeking a new homeland for lifestyle, employment or retirement reasons – again adding to the target base a property investor has to work with in Canada.

10.Canadian Property Market’s Strength and Stability Inspires Massive Real Estate Investment Confidence

The Canadian property market is still experiencing boom times – although this means house prices are on the rise, the attractive exchange rate and relatively lower start prices compared to other investment areas makes Canada’s property market interesting for international buyers.

The Canadian Real Estate Association has reported that residential property prices were up by nearly 13% in April compared to the 2006 figures at the same calendar point, and the average home sale price is around CAD 280,000, which equates to roughly GBP 140,000. The market is strong, built on stable foundations of demand and affordability, there is tried and tested appeal, a sound legal system backing up the market and overall, this makes property investment in Canada an appealing option for investors seeking lower risk, decent potential reward and a market generally built on less risky and volatile fundamentals than many of today’s popular emerging markets.

Between growth in the Canadian tourism industry and the country’s progressive immigration policies, Canada is looking very attractive to property investors. The country’s star is definitely on the rise in many areas of its economic development and Canada’s overall stability gives buyers and investors great confidence that their Canadian real estate investments will pay off over the medium to long term.

• Tweet