Analysts in Canada are worried about the encroachment of foreign owners into the market, claiming that overseas investment is pushing prices higher.

 

An example that has hit the headlines recently was a Chinese student who arranged for their wealthy parents to pay a cool $400k over the asking price for a modest Toronto bungalow!

However the more rational observer sees that foreign investment, whether it is permanent housing for expats, a holiday home or as an investment property, provides a vital boost to the Canadian economy. In what is a challenging economic period for the country the strength of the housing market is a breath of fresh air, and is in fact one of the few sectors that is growing.

The trend of foreign ownership looks set to continue and a significant factor in this growth is that Canada has very few restrictions for non-Canadians interested in buying property. If you intend to spend less than six months per year in Canada you can own a property without having to apply for residency. The same applies to investment properties but you will be taxed differently to Canadian owners. There is a difference in terms of finance, with foreign buyers required to put forward a higher down payment on property. Where as Canadian residents only need to put down a deposit of between 5 -10 per cent, foreign investors will need to put forward as much as 30 per cent.

The actual extent of foreign ownership of Canadian properties is somewhat unclear, there are no definitive figures and market analysts differ in their estimations with some saying as low as 3.5 per cent whilst others claim up to 20 per cent. However, the lack of restrictions coupled with the influx of new properties, Toronto for example currently has nearly three times’ more high-rise condominiums in development than New York City, leads everyone to believe the trend of foreign ownership will continue in Canada.

For details of properties for sale in Canada, visit the Canada listings on Rightmove Overseas. Preparation for anyone considering a move to Canada should include planning for the transfer of your pounds into Canadian dollars. For information on how to do this safely and save money when doing so – giving you more to spend on shopping – speak to currency exchange specialist Smart Currency Exchange.

To understand the full step-by-step process to buying a property in Canada, collect The Overseas Guides Company’s ‘Canada Property Buying Guide’