Brexit Vote Good for Canadian Real Estate Market
You've probably heard the news of the recent UK vote to leave the European Union. Dubbed as "Brexit", a play on the words "British" and "exit", the referendum has already had a tremendous impact on Britain's economy. In fact, the British pound has plummetted to the lowest value it's seen in decades. There has been impact across global economies based on the decision. You may not have considered the potential effect the possible split could have in Canada, particularly on the dynamic real estate market. However, Britain's loss could be Canada's gain when it comes to cost and demand of Canadian properties. Read on to learn more.
Reasons for Impact
One of the main reasons for the impending impact Brexit could have on Canada's real estate market is that investors are now looking for new locations to replace the once-popular London as a safe property haven. London has been a go-to among the world's real estate investors for many years now. However, with the UK's economy on shaky ground, it makes sense that wealthy investors would be looking to broaden their horizons. Thus, the already booming markets in Vancouver and Toronto are likely to see an influx in real estate interest.
Real Estate of Interest
Some Canadian markets have already seen an increase in profits and a bounce-back from difficult times recently. This influx of investors looking to divest their interests out of the London market could mean even more improvement, leading to thriving sales among both residential and commercial properties. Homes, condos and office buildings in Canada have been receiving quite a bit of attention from foreign investors as of late. It makes sense that this thriving market would appeal to those who wish to take their investments out of London.
There have been accounts of many investors placing plans on hold for projects that were set to take place in the UK. They are now eyeing the North American scene for worthwhile ways to invest their capital. Canadian real estate professionals and financial firms are now brainstorming creative ways to woo investors. They know Canada is now being viewed as a more secure bet and that investors possess large sums of money that are no longer allocated for London. Strategic meetings are being formalized by those in banking and real estate to determine the best ways to facilitate the flow of foreign dollars into Canadian real estate.
One thing to consider is that housing prices are already on the increase in Vancouver and Toronto, making it difficult for the average citizen to become a home owner. Foreign investment to these areas has doubled over the past year. Experts do wonder what further influx could mean to housing prices. The Brexit decision is reported to likely allow Bank of Canada to hold its current interest rates steady, however, which is good for the residential market. It will be interesting to see how this dynamic plays out over time.
The effect of the British decision to leave the EU has affected both UK and global economies. Canada may be likely to benefit from the impact, as investors see the stability of the real estate market here as appealing. Let's hope this means good things for both residential and commercial buyers.