Canada Real Estate Investing – The Most Sought After Housing Market of the World

The financial gurus as well as the real estate experts unanimously agree that Canada provides one of the best living opportunities in the world. In fact, it has become the most sought after destination for the investors. Moreover, Canada real estate investing is vast and competitively priced as well as has good appreciation rate. Another major factor that attracted the foreign investors is its hassle free legal system. In fact, if you do a comparative study of property market in US, UK or France, you can easily realize that investment in Canada is quite affordable. In fact, despite the high standard of living in Canada, the cost of living here is much lower than most of the other countries.

With the reinforcement of the Canadian economy, more and more people are migrating to the country. This is leading to a growth in the demand for properties. The real estate experts believe that this growing demand in the Canadian property market will also radically boost the property values in years to come. One of the biggest advantages of investing in this market is that even the non-resident Canadians can property in this country.

The following are some of the factors that you need to understand before investing in the Canadian real estate markets:

The rising of average incomes:
This is one of the factors that you need to take into account while searching for strong real estate markets. It is a good idea to opt for places where the average gross income is increasing faster. This means that the property prices will also follow the same pattern. In fact, it is not the average income that accounts; you need to consider the rate of increase. You can invest in a real estate market even if the average income of that place is lower than the provincial average, provided the rate of the average income is increasing faster than the provincial average.

The flow of booming markets:
You can conveniently invest in a property market, if its neighborhoods had recently experienced a strong growth in their property values. Such increase will also have a strong impact on the surrounding areas. Though at a slower rate, these surrounding areas will also heat up eventually. This is a phenomenon that has been noticed repeatedly in surrounding areas of a booming market as well as in the neighborhoods of redeveloping and improving communities. If you follow the pattern minutely you can easily identify such real estate markets, which are about to experience such booms.

Also read statistics and information about the various economic factors that may affect the market. Reading local newspapers and visiting the particular town’s or provincial website can also help you to get a clear idea about its real estate market.

Canada Real Estate – The Growing Industry

The Canada real estate market presents a wide and untapped opportunity to the prospective investor both for the short terms as well as the long term. The market is still not saturated and is growing at a healthy rate which is in sharp contrast to the US market. This has been fuelled by the performing economy and a presence of a sizeable immigrant population that is actively saving and investing to build up their real estate portfolios. Canada offers its inhabitants nice comfortable homes along with a stable employment and an admirable standard of living.

Canadian property prices have climbed up gradually since the economic and financial crisis ended, even though the U.S. real estate prices had resumed their decline. The Canadian real estate market has made a quicker economic recovery than its US counterpart helped by a sounder banking industry combined with low interest rates and increased buyer confidence.

The Canada real estate market offers a number of entry points catering to a wide range of budgets ranging from the small apartments to the large farms and ranches including properties with their own water bodies. Making real estate investments can be far more money-spinning and worthwhile than other forms of investments. The most popular investment in property is purchase of rental houses. The money returns that an investment property provides are not restricted to monthly cash flow only. Remember that each time when one makes a mortgage payment then you are indirectly paying to yourself only.

The presence of Oil sands in Alberta and the increased commercial exploration activity has resulted in boom in property prices. Edmonton being the capital of Alberta has benefited immensely from the increased investor boom and new inhabitants. Even though prices have increased, they are within manageable and affordable levels compared to the national market. The market is driven by the end buyer and not by speculation so the price spike has not been too sharp unlike in other regions like Vancouver where the boom cycle has been fuelled by intense speculation. This makes the current scenario interesting and enticing for the end home buyer who wants to own their first home or upgrade or buy an extra property for rental income.

According to RBC Economics Research, Edmonton remains the most affordable city in Canada.

The affordability measure is rated at 31.5 %. That means only 31.5% of the monthly income is required to afford an average separate bungalow in Edmonton. This includes taxes, utilities and mortgage payments.

Comparing Canada’s Healthier Real Estate Market to the US Market

Canada considers the United States of America her most vital and central economic partner. The two economies show interdependence and strong economic bond with 80% of Canada’s exports meant for the US market while two thirds of Canada’s imports come from the USA. Nonetheless, the economic conditions of the US market pale in comparison to Canadian real estate market. Canada’s market is thriving while the US market is still struggling to survive for more than four years now.

For us to understand why this is so, we have to go back for a little historical trip. Only then can we see possible developments. Going back to summer 2006, the US housing bombed and many people were affected. It was a lot worse for most people. It made Canada worried thinking that the worst can also happen to them which is understandable.

The Canadian market is booming and flourishing for many years already. Then it has reached prices that are record high in 2007 with the 5.2% highest average appreciation for the years 2000-2009. Home ownership also reached its peak. Thus, it was disconcerting to see Canada real estate market starting to go down in the last quarter of 2008 only to go into complete freeze in the winter of 2009. This happened to Canada’s real estate markets especially to Toronto and Vancouver, considered the strongest. Declines of 50% or higher were experienced leading to fears of long and difficult recession in the real estate market.Fortunately, in spring of 2009, the market bounced back showing skyrocketing sales even to the point of having sales exceeding 100%. Now the Canadian real estate market is seeing steady growth and is doing a lot better than most real estate markets around the world.

There are plenty of reasons for Canada’s bullish real estate market:

Having low interest rates is one reason given by experts. When Bank of Canada slashed rates to.25% record low this low-rate policy helped Canada a lot. Unlike Canada, however, the low rate policy did not help the US.

The US market was riddled with subprime loans equivalent to 22% share of all loans in 2006-2008 compared to Canada which is only 5% being under subprime category.

Canadian banks enjoy the reputation of being the world’s soundest as per World Economic Forum’s assessment. This stance helped Canada from the subsequent credit crunch.

Despite rise of unemployment, the increase wasn’t as severe as the US and economy is slowly improving with jobs being added starting last summer. Canada’s social system deflected personal bankruptcies.

Generally speaking, Canada’s real estate market has risen over the financial crisis that has swept over the globe. It is now considered to be on solid ground which is expected to continue growing with the added influx of foreign investors buying real estate properties mostly in Vancouver. The Bank of Canada has committed to keeping rates steady until summer 2010.

The Vancouver real estate market is actually in pretty good shape. It is also poised for investors with low transaction costs and almost zero restrictions on foreign buying of Canadian real estate properties. Vancouver is a very attractive investment potential for anyone with the right capital and mindset. If you are a potential buyer, investing on Canadian properties will be one decision you will never regret. Definitely, you will be buying into a solid market with sound financial system in a robust and healthy economy.

Why Canadian Real Estate is Such Good Value

Real estate agents, Canadian citizens and foreign investors interested in the Canadian property market are all in agreement – as Canada becomes a more desirable place to live year on year so property investment in Canada becomes a more attractive prospect year on year.

Furthermore, because property in Canada is high quality, plentiful, incredibly affordable and easy to purchase, real estate in Canada is good value across the board.

If you need more proof, consider comparing what you can still buy for your real estate dollar in Canada to what you can currently purchase in the UK, the US, France or Spain for example.

You’ll quickly realise that the strong Canadian dollar (CAD) has not damaged the real estate market in Canada in the slightest. In fact, as the Canadian economy strengthens and more people move to the country, the demand for property will continue to rise which in turn will push up the value of any property investment.

And you simply still get more in Canada than you can elsewhere because property in Canada is less expensive overall – land is less expensive, the cost of living is lower, the standard of living is high…

This all adds up to the fact that non Canadian resident buyers are likely to be in an enviable position when it comes to investing in real estate, chances are they can afford a far higher quality purchase that they can ‘back home’ and they don’t have to become resident to buy in Canada if they don’t want to.

Add the fact that overcrowding is never going to be an issue in Canada as there are 30 million people sharing 38 million square miles of land, and the fact that Canada has a wealth of diverse property available in many stunning locations country-wide to fuel the imagination and satisfy the desires of even the hardest to please purchaser, and you’ll quickly realise why Canada remains such an attractive prospect for so many people.

And by remaining non resident you can benefit further from the property market – you don’t have to go through the rigmarole of applying for immigration acceptance, and yet you can still benefit from all Canada has to offer for up to 6 months of every year – you are even free to open a Canadian bank account, buy a car or land there for example.

Alternatively, you can join the ranks of foreigners choosing to emigrate to Canada including the 3.3 million Brits who have chosen to make Canada home permanently already. Canada is actually the third most popular place to emigrate to from the UK and more and more British citizens are being attracted to this land of opportunity, space and freedom.

This means that as Canada becomes more attractive as a destination of choice, property there will be more in demand which in turn will allow real estate prices to continue to rise making any property investment a good bet!

Whether you’re considering property in Canada from a non resident, investment stand point, with a view to letting it out before cashing in your investment in X number of years, or you’re thinking of purchasing a second home in an enviable location – or you’d like to go the whole hog and up sticks and emigrate to Canada, you will find the buying process a relatively easy and hassle free affair which can only add even more value.

Bureaucratically speaking the whole purchase process is often a lot less tricky than ‘back home’ – especially if you come from red tape rich Europe – and it takes a fraction of the time to complete the property sale process in Canada than in certain other countries where escrow periods are applied to real estate purchases.

And if you would like some cold, hard facts about past performance of the Canadian property market, an average single family home in the Vancouver area sold for CAD 13,500 in 1961, CAD 48,000 in 1974, CAD 120,000 in 1982 rising to around CAD 475,000 today.

It’s true what they say – where people want to live, property values will always continue to rise…and more and more people are choosing to live in Canada making Canadian real estate good value for property investors!

Toronto Real Estate Market

Toronto Real Estate Market – An Overview
The Toronto real estate market, much like Canadian winters, can feel like a harsh environment to navigate for the average Joe. With tougher federal mortgage laws introduced in January 2018; many homeowners have literally been priced out of the market, and existing owners have found their property values sticking in neutral or falling with an average loss of 4 percent.

With property no longer feeling like a guaranteed investment, we take a look at what has been happening in the Toronto real estate market to lead to this downward trend and how is the wheel of fortune likely to turn over the next 12 months?

Mixed fortunes
In recent years property prices have risen exponentially across the GTA, and although this has been a delight for many sellers, it has been a double-edged sword in that fewer people have been able to afford to get onto the property ladder. Those who did buy when the price was high then found their mood falling along with the inevitable decline in market prices as well as those who presumed their home was a stable investment for the future that would only keep increasing in value. There are those of course who are now hoping for a crash to put a definite end to what has felt for many inhabitants as Toronto’s housing affordability crisis, but it is more likely that the market will continue to stabilize with a few bumps along the way during 2019.

New federal mortgage laws
In line with the country’s intentions to limit the amount of debt that the population and financial institutions took on; new federal mortgage laws introduced on the 1st January 2018 meant that Canadians getting, renewing or refinancing a mortgage could find themselves having to complete a “stress test”. This is in order to prove that they would be able to cope with interest rates substantially higher than the contract rate. This was relevant even for borrowers who had a down payment of 20 percent or more and was yet another tweak in what has felt like a long line of regulatory changes to actually get on, never mind being able to climb the property ladder.

Priced out of the market
These changes affected roughly 100,000 of Canada’s population with half of these still being able to make a purchase other than what they had originally planned and the other half giving up altogether. So, although many people rushed either to buy or sell and upgrade to a property that they would not be able to afford when the new regulations came into force, many people found themselves priced out of a market that they could not afford to enter on paper. This is true even if they felt they had the financial means to do so or would have met the criteria set in previous years.

Buying your way back in
The inevitable rise in property prices across Canada was also seen to reach dizzy heights in the Toronto real estate market but what goes up must come down, and these tougher mortgage laws saw the market begin to balance out during 2018. This trend looks set to continue during the spring of 2019, and it is this news, along with February’s announcement of thousands of newly-created jobs that is providing hope for those wishing to buy for the first time or move higher up the property ladder. With 665 new home developments also taking place in Toronto; it literally could become a buyer’s market.

Although Ottawa and Montreal are beginning to see signs of renewed growth and hotting up, Toronto’s real estate market is still generally said to be on the cool side at present, and the literal coolness of the weather hasn’t helped either! A particularly harsh winter has made prospective buyers think twice about even being able to make property viewings and as it takes a while for the snow to thaw so will it take a while for the gradually warming spring temperatures to melt the “froideur” in the Toronto real estate market. More home listings are expected to appear on the market over the spring and summer months, perhaps bringing a modest increase in prices. But, with many other variables affecting real estate trends including elections and the economy; it could be that the Toronto market will neither be firmly in favor of either the buyer or seller but rather your own individual circumstances. Some people will, therefore, be winning, some losing and some breaking-even financially.

Luxury properties
The demand for luxury homes and Condos IS expected to increase and as demand usually comes with an increase in prices; those selling these styles of properties look to be definitely in the winning camp. The average price of a luxury house is expected to reach $3,691,700 within the next twelve months and $2,390,405 for a condo.

Interest Rates
It is not expected that the bank of Canada will increase interest rates more than once this year, but in the same vein, this means that they are unlikely to fall either. The rate is currently 4.375 percent for a 30-year fixed-rate mortgage but with mortgage rates remaining the critical factor in determining the affordability of a home purchase; keeping a close eye on the rate of interest is literally in a buyer’s best interests!

Greater Toronto is a Land of hope
Although homeownership rates dropped in Canada for the first time in 45 years in 2018; it is still a country that has one of the highest homeownership rates in the world. More than 40 percent of households under 35 own their own property, and although Toronto is considered to be one of Canada’s least affordable markets, there is still opportunity and hope in the real estate market to make a good investment.

Need for a Good Real Estate Lawyer in Toronto Downtown
Finding a good Real Estate Lawyer in downtown Toronto is equally as important as a find a good property to buy in Toronto. Some Lawyers provide great service but charge an arm and a leg for the transaction. Some Lawyer advertises their legal fees as the lowest but their service is equally the lowest in the market. Transparency in Legal Fees structure is one of the main issues with Real Estate Lawyer Fees structure in Toronto Downtown. The only Law Firm stands out from the crowd is Shaikh Law Firm because they have posted their Real Estate Lawyer Toronto Fees on their website. Their reviews suggest that they are transparent, honest and provide a good service. When this article was being published in 2019 Shaikh Law is ranked among the three best Real Estate Lawyers in Toronto, along with Jonathan G. Griffiths and Jay Teichman. Jonathan and Jay’s quality of Legal Service is great but their legal fees are significantly higher than Shaikh Law Firm.

How to Choose a Good Real Estate Lawyer in Toronto Downtown
Before you hire your Real Estate Lawyer you should ask the following Questions;

1) How many transactions the Real Estate Lawyer completes in a Month?

2) How long has the Lawyer been practicing Real Estate?

3) What is the Fees Structure and can the Lawyer give a written Quote without any hidden charges?

You should always do your research online, ask a friend for any recommendations. It is important to note that your Realtor recommendations are always biased because they usually get kickbacks for recommending a Real Estate Lawyer. Therefore do your own research before you hire anyone. It is always recommended to call up the Real Estate Lawyer in Toronto for a Free Consultation to review your transaction before you engage anyone.