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Major Opportunities in Canadian

Article Submitted by: Vishal Dwivedi

Sunday, 28 February 2010

Buyers from overseas considering investing in Canadian properties should find many opportunities in the country's residential property market, especially in rental investment property. Rental investment properties in Canada have a good potential for growth and offer high investment yields. Therefore, they represent good investment choices for property buyers from overseas.

While the U.S. economic and housing meltdowns have weighed on the Canadian economy and its housing market, Canada's domestic demand, including that for housing, has remained relatively agile. In that environment, rental investment property has performed exceptionally well. The Canadian rental investment properties have actually seen vacancies fall and rents pick up in 2008. The condominium market is also fairly well positioned to absorb the negative impact of the current downturn and to grow in the future. Several factors, most notably immigration growth, support this assertion. Therefore, in these property market segments, property investment opportunities for buyers from overseas abound.

Bucking the generally negative trend in housing, Canadian rental investment property and condominium investments performed quite well in 2008. Rental vacancy rates in Canada's 34 major centers fell to 2.2 per cent in October 2008 from 2.6 per cent in October 2007, according to the Rental Market Survey released by Canada Mortgage and Housing Corporation. What's more, countering the overall disinflationary trend, the average rent for two-bedroom apartments in existing structures increased by 2.9 per cent in the year ending in October 2008. Some localities even registered double digit growth rates, including Saskatoon (20.3 per cent), Regina (13.5 per cent), Edmonton (9.2 per cent), and Kelowna (8.4 per cent). Importantly, the rent growth on Canada's rental investment properties has been sustained by a favorable supply of new construction. In contrast with the poor performance of rental investment properties abroad, this exceptional performance of Canada's rental properties should make investments in rental property in Canada especially attractive to buyers from overseas.

One of the key reasons why the Canadian rental investment property and condominium markets look poised for an extended growth in the future is the good prospect for continued immigration into Canada. The rise in demand for rental housing and condominiums from the immigrant population has been a determining factor behind Canada's rental property and condominium markets' stability during the current housing slowdown. In general, immigrant families are more than twice as likely to live in a condominium (14 per cent) than their Canadian-born counterparts (6 per *cent), according to Scotiabank Group. Analysis of trends in homeownership by population indicates that more than 25 per cent of the increase in the number of Canadian homeowners between 2001 and 2006 may be accounted for by the increase in condominium-residing households. Property buyers from overseas should therefore consider these strong demand drivers for rental investment properties and condominiums in Canada when making their decisions about investing in properties overseas.

What's more, the strong demand for rental properties and condominiums in Canada also hints that demand for single-family residential properties will likely receive a boost in the near future from the large segment of the Canadian foreign-born population moving into new single-family housing in the coming years. Condominiums are usually a more affordable entry-point to homeownership. Once the new immigrants settle and see their household incomes grow, they tend to move out of the rental properties and lower-cost residences into upgraded single-family homes. As recent immigrants to Canada make their transition from renters to owners, it is reasonable to expect a new wave of an increased demand for Canadian residential properties from immigrants. The prospect of a higher demand in the current environment may be pronounced due to higher affordability driven by historically low mortgage rates and weakening prices. Property buyers from overseas seeking investments in residential properties in Canada should therefore be assured that increasing demand will guarantee that their investment in residential real estate appreciates in value over time.

Overall, property buyers from overseas seeking profitable property investments in Canada should look into the rental investment property and condominiums. Lower property prices this year and demographic factors that support continued expansion of demand in the rental property and condominium markets should make the market attractive to many property buyers from abroad. Foreign investors in Canadian properties could therefore realize sizable gains from rental investment property, which offers stable income flows and a substantial capital gain potential.

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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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