In a weekly poll conducted by Nanos Research Group, the respondents who believe that real estate prices will increase in the next six (6) months jumped to 39.4 %. This percentage is the highest in 18 months. On the other hand, respondents who believe that will be a decrease in real estate prices declined to 16.6 % from 17.1%, the lowest since November 2015. The Bloomberg Nanos Consumer Confidence Index gauged from the weekly polls, increased to 55.9 from 55 in the week ending April 15, the highest since the first week of December. The head of Nanos Research, Nik Nanos stated that the surveys broke the perception that Canada’s job security and personal finances are sluggish.
Although the International Monetary Fund foresees that Canadian economy for 2016 and 2017 would slow down; stating the unemployment rate is expected to rise to approximately 7.3% by the end of the year, Canada’s real estate market remains strong. According to Canadian Real Estate Association (CREA), the national average sale price increase in 17%. However, if you take out West Coast and Central Canada regions, the sale price declined by 0.3%. One of the remaining strong players in real estate is in Quebec, with multi-million investments from local and foreign buyers, more than triple the 2014 value. High-quality education in this area remains to be the driving force to attract migrants and international investors. Consequently, Teranet-National Bank Composite House Price Index showed national home prices rose 0.8 per cent last month and 7 per cent from a year earlier.
The Canada’s real estate foreign market is mostly Chinese investors. In Juwai.com, a real-estate property search engine for the Chinese, the searches and inquires for Canadian properties increase to 134%. This indicates that foreign immigrants and investors remain to choose Canada for property investments despite of economic instability. Chinese investments are expected to increase for the coming years especially in Toronto. According to Juwai.com, the total value of all Canadian properties significantly increased to $14.9-billion in 2015 from $5.6-billion in 2014. Toronto earned around $7.4-billion while Vancouver’s searched properties amounted to $2.5-billion.
The national government is currently trying to figure out the recent value of foreign investments in Canada. Nonetheless, that national housing agency estimates that the new condominiums located in Toronto and Vancouver owned by Chines buyers account to about 43 percent.
In UBC forum in Vancouver, global real estate investment was debated upon. A geography professor David Ley discussed the financial and human resources impact of immigration in Canada and United States. Chinese nationals comprised about 85 to 90% among Europe and Asia immigrant-investors.
He also noted that 73% of properties bought by Chinese buyers were paid in cash. In connection to that, the average value of homes bought by a Chinese national in the United States was thrice the price of homes by their American counterparts. The Chinese buyers who mostly belong to the elite and upper-middle class, wanted to escape health risk and pollution, alongside corruption and food security issues.
In the flip side though, Calgary, Saskatoon and Edmonton are the most affected in the recent economic slowdown due to continued cheap oil prices and other trade barriers. Average home prices in Calgary fell 3.05%, while Saskatoon declined in 2.11%.
Interestingly, the Bank of Canada Governor Stephen Poloz refutes the idea that Canada’ economy for 2016-2017 is flat. He believes an increase in the local economy due to government spending.