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 real estate 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.
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.
Recent news shows that Chinese investors are seriously interested in Vancouver real estate properties. It also shows that these Chinese are taking these properties more seriously than before.
In fact, trips from Mainland China to Vancouver are now being organized by SouFun, an Internet sales company based in China. These trips are consist of wealthy investors from Beijing and Shanghai who are dying to dip their fingers into Vancouver real estate and buy properties for them and their families. The twenty investors arriving this August are potential buyers. They are keen on Vancouver real estate properties in the million-dollar listings.
These investors have special interest in properties having ocean-views and topnotch high-level educational institutions according to Ming Pao Daily News based in Canada. Recent trips from China brought Chinese investors seeking bargain in Canadian real estate travelling under the guise of attending and joining conferences or business meetings. They used those opportunities to look at local listings. The trip this August, however, is the first one from Mainland China with the primary purpose of scouting for properties.
The reason for this fascination and interest in real estate in Vancouver is basically the price level. These properties in Vancouver may be among the most expensive in Canadian market but compared to similar Shanghai and Beijing properties, these are still cheaper. Rich immigrants, especially those coming from Asia, favor Canada as one most preferred destination for immigration. This is because of its overall quality of life, first rate education system, peace and safety plus its health care system.
Asian buyers won’t easily jump at buying these properties immediately. Despite 80% showings in many parts of Vancouver, potential Asian buyers will initially explore possible properties for future homes. Only then will they consider proceeding with immigration. However, some of these potential buyers will really become buyers and our neighbors in the future. They will definitely boost and propel the Vancouver property market.
Vancouver, BC has been named several times over as the “Best City in the Americas” by Condé Nast Traveler’s annual Readers’ Choice Awards. The city also ranked #1 on The Economist’s survey of the “World’s Most Livable Cities” for six years running, and in 2008 was voted one of the best places to live by Mercer Consulting in their “Quality of Living Survey 2008.”Clearly, Vancouver is a very special city. It offers residents breathtaking views of the mountains, inviting beaches, and ample green space. Vancouver has become a premier destination for real estate buyers from around the world. For both personal home buyers and real estate investors, an area’s economy plays a critical role in the decision to buy. They’re looking for an area that can provide a solid base for many years to come. Vancouver has a strong and varied economy that has proven to be resilient in tough times, leaving residents feeling secure today, and hopeful for the future. From major Hollywood film productions to international trade, Vancouver offers its residents employment prospects in every sector.Port Metro Vancouver is the nation’s largest port, and trades more than $75 billion in goods with international partners each year. Such a vibrant trade operation has led to thousands of jobs being created (the number of port-related jobs that have been created across Canada is estimated to be nearly 130,000). In addition, the port also welcomes more than half a million visitors each year who are embarking on cruises to Alaska. These visitors spend their dollars at local shops and eateries, and pour a great deal of money into Vancouver’s economy.Cruise ships are just one way that visitors come to the Greater Vancouver area. With the distinguished Vancouver International Airport located about an hour’s drive from Downtown, tourists from every part of the globe find it easy to get to and from the city. There’s also highway access to/from other parts of the province, as well as border crossings to the United States. With so many visitors travelling to Vancouver, the tourism and hospitality industry continues to be one of the area’s largest employment sectors.Vancouver has also become a well-known destination for Hollywood film and television productions. The city is lauded for its chameleon-like ability to resemble other locales. “Hollywood North” as the city is known, is right behind Los Angeles and New York in terms of film production, which makes this a great place to live if you’re employed in the creative arts.High tech firms love Vancouver because of the availability of highly skilled graduates and the city’s overall livability. Construction also continues to employ a large number of people, thanks to the steady demand for commercial and residential space in the metro area, and also due to the upcoming Olympics.In addition to the city’s excellent economic health, Vancouver is also known for its profusion of educational opportunities. Vancouver is home to two of the country’s top universities, Simon Fraser University and the University of British Columbia. A number of colleges are also located in the area, as well as the Vancouver Film School and the Emily Carr University of Art + Design.For younger students, there are 18 secondary schools, more than 70 elementary schools, and several private schools in the region.In terms of housing, the Vancouver real estate market continues to be strong despite a slump in many other markets around North America.Vancouver is home to some of the most expensive housing in Canada, though prices have been dropping in recent months. While the struggling international economy does play a role in the slowing down of Vancouver’s housing market, property values are dropping more as a result of an inevitable price correction. Housing prices had been increasing at an incredible pace for several years, making real estate in Vancouver inaccessible to a large number of people. According to the Real Estate Board of Greater Vancouver, the price of detached homes increased by almost 70% between 2003 and 2008, while condo prices increased by approximately 82%. Over the past several months, real estate prices have decreased by about 12%. Properties are still holding onto much of their value, which is good news for sellers, yet the market is becoming more affordable, which is great news for buyers.To learn about the unique lifestyle that Vancouver can provide, check out the continuation of this article: “Relocating to Vancouver: Fresh Urban Living.”
