More than Maple Syrup and Ice Hockey – Canada’s Real Estate Market is Gaining Global Attention
Beth Hirshfeld
Canada’s jaw-dropping beauty, high quality of life, and strong global reputation are attracting real estate buyers from around the globe.
In 2021, for the first time, Canada claimed top spot in the annual Best Countries Report by US News and World. The rankings, based on factors such as quality of life, economic and political stability, social services, and respecting property rights, solidified Canada’s global reputation as a stable, safe and welcoming country. This, paired with its stunning landscapes, and vibrant, cosmopolitan cities, has made Canada an attractive home for expatriates, international students, foreign investors, and those looking for a vacation home to enjoy the country’s unparalleled lakes, mountains and wildlife.
Photo: Okanagan Falls,Canada
Canadian Real Estate and the Pandemic
For international buyers, Canada's real estate sector has shown steady growth for more than 20 years, with few signs of cooling. In recent years, low interest rates, record levels of immigration, and a growing millennial cohort have created a large housing demand in Canada that has boosted prices. The pandemic has amplified this trajectory, and the country’s property market has boomed.
In line with global trends, this year has shown extraordinary demand for luxury Canadian real estate, as buyers looked for a larger and more well-appointed place to spend more of their time. A shortage of luxury property across Canada’s major cities combined with a revitalized confidence in the economy suggests that property gains and growth will continue moving forward.
Small cities and cottage towns across Canada also faced growing interest as city dwellers searched for larger and greener spaces to work during lock-down. This increased home prices, and started a trend of bidding wars and purchases “site unseen”, with some Canadian communities experiencing an incredible 75% increase in house prices over the past year. The astounding gains follow similar trends in New Zealand, Australia and Britain, where there is an expectation that remote working will continue in some capacity even as the world re-opens. The re-opening, however, has also renewed interest for urban real estate, particularly on the luxury front, as city dwellers enthusiastically return to normal life.
Moving forward, though Canada will continue to grapple with limited housing inventory, demand appears solid and well-positioned for growth, fuelling the real estate market for the months ahead.
Photo: Northwest BC, Telkwa
Real Estate Investment
According to the PwC Report “Emerging Trends in Real Estate for 2022”, Vancouver and Toronto, two of Canada’s largest cities that are both consistently ranked as some of the top cities in the world, continue to lead in terms of investment and development prospects. Other centres such as Montreal, Calgary, Ottawa, Halifax, Winnipeg, Edmonton, Saskatoon, and Quebec City, are also attracting investor attention. For the third year in a row, Vancouver remains the top market to watch.
PwC’s Report also highlighted Rental Housing as one of the best investment and development prospects for 2022. Canada’s rental market dipped in 2020 but has recovered well in 2021 with average asking rents increasing month over month for the past 5 consecutive months. Demand for larger unit rentals grew in 2020 and has remained constant in 2021, while the market is starting to see increases once again in smaller unit rental numbers, with tiny units leading growth in recent months. In addition, the development of specialty real estate – such as student housing – is also emerging as a new investment opportunity to watch.
Regional vacation markets that enable visitors to drive rather than fly have also gained great attention. Beautiful getaways such as Muskoka, Niagara-on-the-Lake, and the Okanagan Valley, are attracting new buyers and seeing record growth.
An overview of a few related properties can be found at the end of this article.
Considerations for International Buyers
For those considering property in Canada, the pandemic has made it simpler than ever before to buy a home from overseas. New technologies make it easy to both virtually view and “walk through” a property, speak with agents and other real estate service providers, and sign property agreements. Mortgage documents do require a buyer to either be in the country or have a power of attorney, but this can also be arranged overseas as long as the originals are delivered safely to Canada.
Canada does not currently place any restrictions on the number or types of property a non-Canadian citizen can purchase. Foreign buyers should, however, consider the tax implications and requirements of a property purchase, which can vary widely by province and city.
As a proud Canadian that has owned both city and lake properties in Canada, I understand first-hand the importance of a knowledgeable and trustworthy team to optimize the nuances of the Canadian property market. This is even more important for international buyers who must navigate not only the intricacies of the local market, but also the local laws and taxes. Christie’s International Real Estate / Dubai Premier Estates is a leading real estate company that is part of Christie’s International, the world’s largest luxury real estate agency. As part of the Christie’s International network, we connect and partner with 135 affiliated brokerages – which include several across Canada - and 27,000 real estate professionals, offering clients targeted local expertise and support even if they live overseas. If you want to take advantage of the Canadian real estate market, and perhaps enjoy a little hockey and maple syrup on the side, we are here to help.
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