While economic turmoil has flooded worldwide markets, Canada has become an economic safe haven. International money has been parked for safety and ROI, and has fundamentally became a haven to provide the world what it needs for at least the next couple of decades.
Though Canadians have been programmed to look elsewhere for opportunity, 2011-2020 will be the exact wrong time to be doing so. In fact, Canada is in its first year of what will prove to be Canada’s economic decade, and the best time in history to invest here.
Unfortunately, due to a misguided belief that cheap is good when investing in real estate, many Canadian investors have turned their prospects south of the boarder to the US as real estate prices continue to plummet.
Canadian media has been flooded with the tales of investors chasing the cheap price of US real estate, as well as their deals and steals. However, what these investors failed to consider were the metrics involved in analyzing a market’s potential, such as currency risk, taxation, unemployment rate, vacancy rates, property supply and demand, and have taken the ‘buy cheap’ risk anyways despite the reality.
Moreover, replacement costs mean nothing if demand is non-existent, however it is a wonderful tool to use when selling properties. Investors searching for long-term sustainable wealth also need long-term sustainable economic fundamentals. An economy that shows a downward progression will eventually spillover to the real estate market as well, therefore creating a high-risk real estate market.
GDP growth leads to job growth, with attracts migrations, leading to population growth and increased rental demand. This demand drives rental prices up, pushes people to buy properties, and eventually leads to property price increases.
This is exactly the situation in Canada right now, creating jobs by becoming the world’s safest supplier of four key commodities entering the supply and demand super-cycles – food, fuel, fertilizer and forestry).
Among some of the best Canadian cities to invest in real estate are in Alberta were more jobs are projected to be created in a month than the total jobs created in US over the next 10 years.
Source: Don Campbell – Canadian Real Estate Wealth
