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Canada's Economic Policies Support Investments in Real Estate

Article Submitted by: Vishal Dwivedi

Wednesday, 24 February 2010

The Canadian government's recent policy choices have given a major boost to the nation's property markets, thereby supporting investments in real estate in Canada. These indirect interventions in the market should provide more confidence to foreign investors that investing in real estate in Canada is not only a sound investment decision, but also an investment choice that stands to benefit from proactive government policy. As the Canadian government's policy is geared toward sustaining and boosting demand for real estate, foreign property investors should consider it as a positive factor that promises to support their investments in real estate in Canada.

Investments in real estate in Canada benefit from the governments monetary policy. Bank of Canada has already cut its benchmark lending rate to a mere 25 basis points, the lowest ever in recorded history of Canada. To put this in perspective, the U.S. Fed has also reduced its Fed Funds rate to the same rate. However, whereas rising delinquencies and foreclosures have resulted in more stringent lending standards in the United States that have kept mortgage rates on conventional mortgages on elevated levels, lending standards in Canada have not been tightened to the point at which lending to prospective property buyers and investors has become severely restrained. Hence, Canada's monetary policy has helped the Canadian property rebound this year, with sales activity and prices starting to recover at a brisk pace. This should stimulate investments in real estate. As lending from banks is readily available to creditworthy property investors, including investors from abroad, international property investors intere

sted in buying investment property in Canada should find many real estate investment opportunities at historically low interest rates.

On the other hand, investments in real estate in Canada also benefit from supportive fiscal policy. The government's tax policies have been developed with the intention to re-energize the Canadian residential real estate market as soon as possible in order to prevent large home value losses that increase financial leverage and thereby burden Canadian households. Federal income tax cuts, temporary tax credits for home remodeling, permanent first-time homebuyer tax credit, and increased funding for first-time homebuyers through the Home Buyers' Plan should all combine to boost demand for residential properties this year and the next. Therefore, this should bode well for investments in residential real estate in Canada. All the mentioned fiscal interventions should help sustain prices in the current market and support price growth once the economic outlook improves, which may be as soon as the second half of 2009. Hence, property investors in Canada, including investors from overseas, may see their investments i

n real estate appreciate in value as the housing demand facilitated by the government's fiscal policies increases.

When lower housing prices this year are added to this mix of interventions supporting the housing demand in Canada, the outlook for a recovery in the Canadian residential property market looks even brighter. It also provides a sigh of relief for investors owning or interested in buying investment properties in Canada. With this in mind, foreign investors should consider investing in real estate in Canada as soon as possible in order to take advantage of the currently lower prices and favorable mortgage rates before the market starts to recover at a more rapid pace. The government's active involvement in the Canadian property market indicates that the government understands the economic significance that real estate has on the overall economy. It also points to the government's commitment to facilitate growth of Canada's property market and thereby to support increases in housing values. International real estate investors should benefit from the government policy that supports foreign investors' objective to

realize solid returns on investments in real estate a safe investment environment within a reasonable timeframe.

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About The Author:

Jimco International is overseas real restate agent deals in Tremblant real estate and International real estate for buying and selling of properties. You can get more information on Jimco if you're looking for buying property abroad & Ski property for sale.

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