The Real Estate Scene in British Columbia, Canada

Real Estate Investing involves buying, selling, managing and renting real estate for financial gain. Many rich Canadians are investing in real estate in Canada to maximize their capital gains and for financial security.

To invest in canada, especially in British Columbia, you need to do some extensive research to know the current and the future opportunities for real estate investment. As a prospective investor, you should analyze the British Columbia Real Estate market closely to see which cities have the potential for growth in the coming decade.

The British Columbia property market, though reviving from a bit of a low period, is currently booming and it is the right time to invest in positive cash-flow properties here. Customer confidence is on the rise and the mortgage interest rates are quite low. This has created a positive environment for investors and perked up residential property sales this year.

The city of Vancouver has attracted the most interest of the British Columbia land and buildings market. Not only real property investors but also home buyers, young and old alike are rushing in for their dream investment. There is certainly no shortage of opportunities in the present real estate market condition. Currently, it is expected that the price of residential property in the British Columbia area could rise by 8% and more than double of that in Vancouver. In Downtown Vancouver, the prices of condos will be pushed from CAD $500 per square feet to about $1000 per square feet, making the city the seventh most expensive place in the world to stay in. The city of Victoria is also experiencing record sales in this quarter.

Surrey is another city growing fast in terms of the British Columbia landed property market. With major infrastructure and transportation projects coming up, the city will experience explosive population increase and this is definitely a good indication for property growth. The other towns in the British Columbia region which have a lot of potential in the landed property investment scene are Abbotsford, Kamloops, Kelowna, Dawson Creek, Oliver, Fraser Valley, Maple Ridge and Pitt Meadows.

However, it is to be remembered that the free hold market is not an organised one; hence, the investor is expected to put in a lot of personal effort and time. The investor has to first locate the properties in which to invest, and then investigate and properly verify the status of the property, prior to purchase. He has to bargain hard and negotiate a sales price with the seller and finally, draw up a sales contract with the assistance of a land holdings attorney.

Real Estate Investing Forums can be a good way to get your land holdings queries answered and stay abreast of current market trends in Real Estate, Canada, like the right place to invest in, the correct prices to expect and most importantly, the right time to sell. Whether you are a new investor or a seasoned one, participating in real property investing forums offers opportunities to connect with like minded people from all around the world and freely share strategies and experiences.

Chinese Investors – Immigrants Buying High-End Victoria, BC, Real Estate

Canada boasts a solid financial system, political stability, an excellent educational system, a good social welfare net, and a welcoming immigration policy. And all these things are attracting foreign investors and immigrants, especially from mainland China, who are buying houses, but not just any houses. They are looking at high-end Victoria, BC, real estate.

Earlier it was investors and buyers from Taiwan and Hong Kong coming into the Vancouver area. Now, it is investors and buyers from mainland China, in even greater numbers, seeking to purchase Vancouver and Victoria, BC, real estate. These investors/immigrants view Canada as good place to store their wealth and this area in particular as a good place for their children to get a western education. An added bonus is that it is not all that far from their Asian businesses.

Last year, Soufun, China is largest real estate website, organized a trip to the US in order to buy overseas real estate. This year, Canada was chosen as the destination for the real estate buying expedition. The people on these tours are looking to buy luxury homes for the purpose of immigration and so that they can send their children to Canada for study. The bulk of the activity is in the Vancouver area, but much of it is spilling over to Victoria.

The reasons why wealthy Chinese want to buy in Canada are that:

1. Canada is a safe place for investing in real estate. The Canadian housing market remained relatively unaffected while the US market suffered a devastating downturn. Further, the flow of immigrants into Canada keeps the housing market fairly stable.

2. Canada has one of the best educational systems in the world, with generous government subsidies.

3. Having been voted the most livable place on earth eight years running and with a vibrant cultural diversity, Canada is also attractive to vacation-property investors.

4. Canada is free medical care and substantial childcare subsidies, as well as its solid social welfare and pension programs, make it attractive to both parents of younger children and retirees.

The attractions of Victoria in particular are the mild climate and breathtaking scenery, the cultural diversity and educational opportunities, and the array of entertainment and architecture. The capital city of British Columbia, Victoria is a bustling cosmopolitan city that is home to North America is second-oldest Chinatown. And now Victoria is drawing wealthy Chinese luxury home buyers.

There is, then, an opportunity here for sellers in the high-end Victoria, BC, real estate market. The trick, though, is in knowing just how to market to this new wave of luxury home buyers, and this is where a reputable, knowledgeable Victoria, BC, realtor can be a huge help. Here is what a realtor can do, especially in an unfamiliar market with a new kind of buyer:

1. Provide a comparative market analysis (CMA) to determine the best price so that the asking price is neither too high nor to low, either of which can slow down the sale.

2. Provide a marketing plan aimed specifically at the targeted buyers

3. Ensure maximum exposure to the greatest number of qualified buyers

4. Act as a negotiator and guide throughout the process

The time is ripe for selling luxury homes to these new buyers, but traditional marketing methods may not be enough. You are going to need a Victoria BC realtor with a solid online presence and effective Internet marketing system.

The Future of Canadian Real Estate Market

Numbers clearly indicate that last year was a very successful one for Canadian real estate market. Sales climbed over 520 000 units, up 7.6 percent from 2006 levels. This was the largest growth since 2002. Transactions via the MLS systems have reached more than 500,000 units sold. The average real estate sale price was up by 14.1% to $317,825 in December 2007 when compared to December 2006

However, year 2008 opened a number of questions. It wasn’t only the US real estate market bubble, but also oil and food price problems that made many people believe recession is knocking at the back door again.

Canadian economy has slowed down a bit at the end of 2007 and GDP growth for Q1 2008 was negative: -0.1 per cent. Reasons? Export level is to blame, for one. Due to problems in Canada’s biggest partner, USA and weak US dollar, exports went down. Rising commodity prices are actually not bad for Canada. Fossil fuel costs are rising, that is why more and more nuclear power plants are being built in the world. And Canada is world’s top uranium supplier, covering 25% of the world’s needs.

The biggest world economy and our nearest and the most important neighbour is USA. Canada wants to know if we can experience the same real estate problems as our neighbour.

But who is to blame for the real estate crisis in the States?

After the Dot-com bubble and 9/11 events, FED interest rates fell to 1% and real estate started booming. It was very easy to get subprime mortgages. Properties were overpriced and than the bubble bursted – everybody knows the story. Is this what the future holds for Canada, too?

Well, not quite.

Subprime mortgages are the biggest difference. They can generally be defined as mortgages offered when home purchasers do not fit the banks’ prime mortgage customer profile. While they cover about 20% in USA, Canadians seem much more conservative in this question – similar mortgages create about 5% of the market. Canadian loan policies are more strict than in the USA. The most dangerous are “teaser” mortgages that offer low initial rates, then

later reset at a higher level, or other mortgages made to individuals with minimal income and no coverage contributed to the crisis substantially. These products are not common in Canada, however, new ones emerged on the Canadian market recently and subprime segment is expected to double in next five years.

Lower numbers of sales and rising new listings seen recently are obvious. The question is, whether it’s just simple trend correction, or bubble losing air faster and faster.

Predictions by experts remain optimistic. Resales are expected to drop, but still supposed to remain above 465,000 in every of next two years. Decline in new starts is expected as well, but with numbers still above past years average.

Interest rates are not supposed to change substantially. A cut from 3.0% was expected in June and may be still possible in the near future. On the other hand, other commodity price turmoil may raise inflation and consequently interest rates in the future, making mortgages more expensive.

Net migration is believed to remain on high level of about 200,000 people. People who will search for homes on the market! On the other hand, Canada’s birth rate is decreasing, potentially lowering future demand for housing.

Baby boomers: First baby boomers from the 1947-1966 period will retire. The question is whether they will look up for recreational property in Canada, or sell their house and move to Costa Rica?

Energy prices: probably will influence the structure of demand in the future. Energy consuming huge houses in distant suburbs will be pushed by inner city modern condos.

Everybody should make his or her own conclusion based on the above facts. Canadian real estate is slowing down now and market is turning from strictly seller driven to balanced one, with more affordable housing. However, buying real estate will be still a good investment, with price growth beating the inflation rate.

Canadian Real Estate Crash

For 5 years running, predictions of a crash in Canadian real estate have failed to materialize. Industry experts with decades of experience have been baffled by the staying power of Canada’s housing market, as it’s now the world’s most overpriced real estate, using comparative income levels as a measure. Not only this, Canadians are among the most indebted of any nation on earth, making the housing market that much more susceptible to a crash. The average Canadian is now $76,000 in debt.

Nonetheless, housing prices have surged relentlessly forward year in and year out, stretching the budgets of Canadians to levels never seen before in Canada’s history. Like many nations, Canada has adopted the belief that a house is an investment, therefore renovations, updates, and any house expense can be viewed as part of that investment. Even though professional investors will say that houses aren’t investments, many people believe they are. Why?

The belief stems from the notion that houses always go up in value, an idea most likely put forward by the real estate industry itself. Is it true though? It doesn’t take much hindsight to see that it’s patently false. Housing crashes have happened everywhere, even cities which were convinced it could never happen to them, like San Francisco or Los Angeles. Still, people believe their house will never fall in price because they’re told that continually by realtors, mortgage brokers, home renovation shows, and even banks. It’s no wonder they believe it.

The dangerous part of believing this is that it’s potentially devastating to your personal finances. When you buy a home worth $250,000-$1,000,000, your losses could be catastrophic if the market moves against you. Imagine trying to renew your mortgage when you owe $350,000 and your house is only worth $250,000. You may think the bank will overlook it, but they won’t. They’ll ask for a check to cover the $100,000 shortfall and failing that, they’ll repossess the house and sell it to recover their losses.

In Canada, the average home price is now north of $450,000, which is astounding when you consider that most of Canada is frozen wasteland where nobody in their right mind would want to live. This price run up as been fueled by Canada’s lowest interest rates in recorded history, for the longest time in recorded history. Practically everybody owns more house than they would be able to afford with historically normal rates of interest. This is a very dangerous scenario, because what happens if rates rise or prices fall? Literally millions of Canadians will be bankrupt. House prices will crash, banks will go out of business, and the country will descend into a depression.

In fact, that scenario is beginning in Alberta, where oil prices determine the financial state of the province. Alberta is the Texas of Canada, only less diversified economically. When oil crashes, Alberta crashes, and oil has already crashed. Albertans are the most indebted people of anyone in Canada, averaging a staggering $124,000 in debt per capita. This doesn’t include mortgage debt either, this is only personal debt.

And now the province is sinking economically due to oil falling. Realtors report that already they’ve seen a 45% increase in listings of houses, as sellers rush to sell before the housing crash. What happens to banks when 1 million people who owe on average $124,000 fall into financial difficulty? Nothing good. Add to that the value of their properties falling and you have the recipe for a total disaster.

This may be the first province to fall, but rest assured, other provinces aren’t far behind. Although they may not be quite as bad as Alberta when it comes to debt, they’re still the worst in the world, and that’s bad enough. Yes, Canada is in for a very hard landing, no matter what the pundits say. Canadians have drunk the Kool Aid of low interest rates and rising house prices forever, and now the day of reckoning is here. Everyone from the International Monetary Fund to the Bank of Canada has warned Canadians, but to no avail, the home renovation shows, which air for 3 straight hours during prime time in Canada apparently have more persuasive power.

Most Canadians are too young to know what happens in a real estate crash, as it’s been 30 years since one occurred, but they’re about to find out. Canada’s 5 years of good luck just ran out, as its largest and most important export is now worth half what it was 6 months ago. Add to this the fact that all commodities have fallen just as badly, and being that Canada is a resource driven economy, there’s little doubt the country is headed for very hard times indeed.

Why Canada Continues to Attract Real Estate Investors

Real estate experts, foreign investors and the citizens of Canada unanimously agree that Canada has everything it takes to create better living opportunities and has therefore become one of the most sought after destinations in the world. In addition, real estate in Canada is competitively priced, vast and has good appreciation rate. The hassle free legal system in Canada is another reason why foreign investors flock to Canada. A comparative study of real estate in UK, US, Spain or France, will help you realize that Canadian real estate is not very expensive. You will find cheaper land in Canada and a myriad of real estate options to invest in.

As the Canadian economy strengthens, more people are expected to migrate to this country, leading to a rise in demand for properties. According to real estate experts, this growing demand will boost the property values radically in years to come. In contrast to the high standard of living, the cost of living in Canada is lower than many other countries. In Canada, foreign investors can buy cool properties that they probably couldn’t have afforded in their own countries. The biggest advantage is that you don’t have to be a resident of Canada to purchase property in the country. This puts foreign investors in an enviable position for being able to invest in a higher quality purchase in Canada as compared to their own homelands. Owing to the abundant land available, overcrowding is never going to be an issue in this incredibly beautiful country. Besides, Canada has a diverse property portfolio that can please even the most fastidious buyer.

The best part of being a foreign investor is that you virtually get to enjoy almost all the privileges and benefits as any other citizen and yet, not go through the painful ordeal of applying for immigration acceptance. Thus, as a foreign investor, you are allowed to open a bank account in the country and have your own land and car. Alternatively, you can make Canada your new home by permanently settling in this country like millions of Europeans, who have already settled here. This explains why Canada is the third most popular emigration destination. The ever-increasing popularity of Canada will continue to attract more people in future. This popularity of Canada among expatriates ensures a steady supply of money in the property market.

A quick look at the figures mentioned below will throw light on the past performance of Canadian property market. Listed below are the rising prices of a single-family home in Vancouver:

1961 – CAD $13,500

1974 – CAD $48,000

1982 – CAD $120,000

2007 – CAD $475,000

Canada provides excellent rental opportunities for real estate investors. Thus, if you purchase apartments and town houses in some of the hottest areas in Canada, you can enjoy a steady income and cash flow in the form of rent. This allows you to enjoy capital appreciation and build equity in the long run. No matter what the reason may be for your investment, Canada has a very simple buying procedure and you can close a property deal in a very short period of time.

Mary Wozny