Real estate investors are watching Canada carefully as a downturn in the market is expected soon. If you have wondered whether to offload your property or sell your home, now could be a good time to downsize.
Let’s look at the reasons we think it’s time to downsize:
1. Foreign Investors May Soon Be Forced Out
The Canadian government has proposed a 2-year ban on foreign investors. This means that anyone without Canadian citizenship or residency will be unable to purchase property for two years if the ban is passed.
“Foreign buyers make up about 3% of deals done in the Canadian marketplace, and in major cities it’s a little bit higher,” said Andy Taylor, a broker with Sotheby’s International Realty Canada in the Toronto area. “They like Canada because we’re politically and financially very stable.” (mansionglobal.com)
The percentage of deals done with foreign investors may be small, but they tend to be high-priced properties, pushing considerable income unavailable to real estate investors.
The bill is highly controversial, and it is unclear if or when it may pass. It has been a prominent topic in the media lately and may push foreign investors to invest quickly, prior to the billl going into effect.
By selling properties now, you may have a larger audience than after the ban is passed.
2. The Economy is Changing
Home prices in Canada have been high for months, but in April dropped by 12.6% on a month-to-month basis while interest rates continue to go up.
In the US, there is talk of a recession on the horizon. By downsizing your property portfolio now, you may be able to get the benefit of a good sale now and a pick up of property during the downturn at a lower price. The average length of a recession is 10.3 months, meaning we can expect a bounce-back quite quickly.
The period of recession is the most complex for real estate investors, and it is vital that you lean on experts such as the Regalway team to know when to buy, when to sell, and what properties are the most likely to net income.
Use the form below to book an appointment with a Regalway team member today!