subject: Canada Leads the Property Pack [print this page] Canada Leads the Property Pack Canada Leads the Property Pack
We all know just how grim the final months of 2008 were in the international property market. Prices plummeted, estate agents boarded up their shopfronts and the economic pundits predicted more gloom. As the UK left the "noughties" and entered the "twenty-tens", the situation remained unglowing: at the end of 2009, home prices in the UK were down 1.6% from the same time in 2008, and in the US they dropped by 3.6%. Leading the global real estate recovery, however, is Canada, where home prices rose by 19%. Good news for sellers, not so good news for buyers, especially buyers coming new to the property market there, looking to buy their first home or holiday home in Canada.
However, the situation is set to brighten for buyers intending on purchasing in the second half of 2010 or in 2011. A rising number of new properties coming on the market will give buyers more choice, the anticipated rise in mortgage rates in July could slow down turnover and the introduction of HST (Harmonized Sales Tax) in British Columbia and Ontario on 1 July means the current race to buy property there before the deadline will end. All of these factors should cool the heated demand for homes, which, combined with solid increases in the number of properties being offered for sale, means that buyers will be in a stronger position.
Of course, Canada is one big country, with big variations in the real estate markets province by province. Average house prices vary wildly as you move from the Pacific to the Atlantic. At the higher end of the market, the current hotspots are Kelowna, British Columbia, and Montreal in Quebec, followed by Victoria, BC, and Ontario's main city of Toronto. Meanwhile, Vancouver continues to be the most expensive city in Canada in which to buy property, with the average house price sitting at C$693,482 (almost 450,000). In Alberta, on the other hand, the cost of the average house in Calgary rose by a comparatively small 8% during 2009. [See table at end of article.]
The continuing strength of the Canadian dollar to the pound means that cost of buying property in Canada for Britons is not the bargain it once was. Certain regions of the country still offer excellent value for money, however, for those who cannot afford the BC lifestyle (and prices). On the far side the country from the multi-million-dollar oceanfront homes of British Columbia, Nova Scotia on the Atlantic offers the millionaire lifestyle at very reasonable prices. Just outside of the sailing mecca of Chester and only 45 minutes from Halifax is a luxury waterfront villa development, where you can purchase an off-plan custom designed three-bedroom, two-bathroom villa for just over 250,000 and admire your yacht from your terrace. Or, if award-winning architecture, lots of land and lake frontage plus a private island is more to your taste, outside of Yarmouth is a spectacular post-and-beam timber frame home that sits on more than 57.3 lakefront acres, including a private two-acre island, on the market for under 650,000.
AVERAGE COST OF A HOME
(Canadian Real Estate Association CREA MLS statistics for March 2010)
British Columbia
516,970
Yukon
292,966
Alberta
362,231
Saskatchewan
239,716
Northwest Territories
318,222
Manitoba
219,046
Ontario
349,405
Quebec
241,566
New Brunswick
155,110
Newfoundland
234,403
Prince Edward Island
139,938
Nova Scotia
211,172
Buying property in Canada is a more civilized and efficient process than it is in the United Kingdom, with laws in place to protect the buyer and the seller. Anyone trading in real estate has to be professionally qualified and licensed, and each provincial board licenses its own agents, who are known as realtors. The MLS or Multiple Listing System is an excellent initial search tool to find out what's available and what it costs. The public portal to this proprietary database is www.realtor.ca. The huge advantage of the MLS system, from a buyer's perspective, is that you don't have to go along a high street visiting every estate agent in town to ensure that you've seen everything on the market that might suit you. Use a licensed estate agent to help you through the process. Their services are free to buyers, and they'll know the questions to ask that you don't about any given property. This is a mistake I made when I purchased my first home in Canada: I saw an ad for a property I liked in the local newspaper, rang the agent and made an appointment to view; liked it even more and put in an offer, without conditions. Why? Because I didn't know the appropriate conditions to ask for, or even that I could attach conditions. Why? Because the agent was representing the seller, not me the buyer, and while he had to deal with me honestly and fairly, I wasn't his client and it wasn't his duty to protect my interests or to advise me. And I found myself with a cottage where the well dried up every summer. In any property transaction in Canada you want to be the client, not the customer. Like lawyers, realtors owe their client a duty of care that they don't to a customer. If you are only their customer, they cannot negotiate on your behalf, or recommend a price other than the seller's asking price.
There is a growing number of estate agents in Canada who are relocation specialists, working long-term with new and potential immigrants not just with their home purchase, but coordinating with recommended immigration and property lawyers, accountants and contractors, as well has helping entrepreneurial immigrants acquire turn-key businesses. In Nova Scotia, for example, you can live and work on a beach that is so picturesque it once featured on the Canadian $50 bill. The eco-friendly four-star cottage complex even comes with a detailed operating manual, all for just over 500,000. Or if you fancy running a bed and breakfast with a professional chef's kitchen just steps from the ocean and deep water moorage, there's one new to the market at approximately 255,000.
The forecast for the Canadian economy, which grew by 5% last year, is good and inflation is running at 2%. And, with a more balanced real estate market just around the corner, acquiring property in Canada in the near future is an excellent investment in preparation for a new life.
Kilmeny Jane Denny is the UK's only licensed Nova Scotia property consultant and the director of Second Home Nova Scotia. www.secondhomenovascotia.com
