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Investments in Residential and Commercial Property

Article Submitted by: Vishal Dwivedi

Sunday, 28 February 2010

Economic and financial fundamentals underpinning the Canadian real estate market make this nation's real estate a safe haven for investments in residential and commercial property. This bodes exceptionally well for international real estate investors who decide to buy properties in Canada because of economic and financial instability in their home markets. Yet, given that the outlook for Canadian economy is generally better than that for many economies abroad, investments in residential and commercial property in Canada will likely perform better investments in property abroad.

In the current global economic and financial downturn, Canadian economy has proven exceptionally resilient to external blows and financial instability from adverse developments in international markets. This is a result of Canada's strong financial system, sound lending requirements, and economic growth that has reduced the effect of external demand on the country's economic expansion. As a result, the Canadian residential and commercial property have been spared a major bust that has been wreaking havoc on both residential and commercial property markets around the world, especially in the United States and United Kingdom. Going forward, restored economic stability will support Canada's expansion, making investments in residential and commercial property more attractive to international real estate investors from abroad.

Relative to most economies abroad, the Canadian economy has recorded much milder declines in the value of its annual gross domestic product. It has also outperformed the U.S. economy because of Canada's strong domestic demand. Canadian economy is expected to grow by a 1.3 per cent annualized rate in the third quarter of this year and another 3.0 per cent in the fourth quarter, which makes Canada the first major economy in the world to move out of the recession. The rebound in Canada's economic growth next year will be at least double that expected for the United States and more than quadruple that of Europe's. This economic performance suggests that Canada's residential and commercial real estate markets stand a good chance to outperform property markets in United States and most European nations. Therefore, investments in residential and commercial property in Canada markets should prove attractive for many real estate investors, especially to foreigners who consider buying residential and commercial proper ies in the current market.

Investment in residential and commercial property in Canada also benefits from the stability of the Canadian banking sector. Banks in Canada have not been as bruised by the recent global financial turmoil as have been most banks abroad. Lending standards in Canada are sounder than in most developed economies, especially in the United States and United Kingdom. These standards prevented the emergence of a highly leveraged lending which boosted speculative activity in the residential and commercial property markets and created the real estate bubble. As a result, asset prices, especially prices of residential properties, and debt service burdens in Canada did not rise to unsustainable levels. This is evident in the small number of foreclosures and bank failures. What's more, the strength of the Canadian financial system is evident in the fact that its banking sector reported a profitable year in 2008, a major contrast to the substantial losses reported by most major banks abroad. On top of this, World Economic

Forum recently ranked Canadian banking system as the soundest banking system in the world. The financial factors that underpin the Canadian property market testify to the safety of real estate investment in Canada.

The resilience of the Canadian economy relative to most economies abroad and the exceptional strength of its banking sector guarantees that investment in residential and commercial property in Canada comes with the utmost safety. As the economic and financial fundamentals underpinning the Canadian property market improve in 2010, so will the prospects for higher returns on investments in residential and commercial properties. Recovering employment and rising household incomes will improve demand for housing and will reduce vacancies in commercial real estate. Home buyers and international real estate investors considering buying residential or commercial property in Canada should therefore rest assure that their investment will thrive in a stable environment with a major long-term growth potential.

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About The Author:

Jimco International is International Real Estate 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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