Is Canada still a viable option for foreigners looking for investment properties?
Since Covid, many people have been looking for ways to spread their investments in ways that could be beneficial to their lifestyle. For example, during Covid, there was a massive uptick in properties far from the cities, with land or waterfront. The possibility of homesteading or simply being in nature was enticing as the virus kept us all distanced. However, foreigners (mainly U.S. residents) had difficulty accessing their properties given the border restrictions. Since restrictions have eased, many have asked us if Canada is still a good option for investment properties. Here is the answer in short: “Yes!”
If you’d to know more, keep reading:
It’s a great way to diversify your portfolio.
Investing in several different ways is a great way to build wealth with less risk. A recession can indeed affect your ability to make money on the stock market and in real estate short term, but historically real estate will bounce back. Real estate also offers different opportunities to make money, as in rental income, while inflation inevitably raises the value of your investment. By owning property in another country, you are able to take advantage of a stable economy that has continued to grow quietly over the past U.S. decades. “Not only that, investors can also claim certain tax deductions on their foreign property when filing their tax return in the United States.” (https://budgeting.thenest.com/)
Canada is friendly to foreigners looking to own property.
U.S. residents can own property in Canada without becoming a resident of Canada but must report income or proceeds from a sale to both country's taxing authorities. (Investopedia.com)
Canada’s rules against foreigners owning property are surprisingly easy-going compared to other countries, but then again, Canada is well known for being friendly and easy-going.
Canada has a stable economy.
“Canada has the 11th largest economy in the world, based on nominal Gross Domestic Product. A member of both the Organization for Economic Cooperation and the Group of Seven, Canada is considered one of the most stable economies in the world. In 2015, according to the Forbes Global 2000 List, Canada is ranked 8th with a total of 52 companies on the list.” (studynovascotia.ca)
Canada also has a strong and stable political presence in the world. All in, Canada is a low-risk option for foreign investors.
Canadian real estate is extremely strong.
Over the past few months, we have seen a slight dip in Canadian home sales overall, but that simply brings the value of homes back to the projected rates from pre-Covid. Ontario remains extremely strong, however:
“Looking at Ontario’s housing market, prices are up in Toronto and Brampton while transactions are down. The same can’t be said for Mississauga, Hamilton, and Ottawa, which all saw slight declines in average sold prices month-over-year. Still, prices are up year-over-year for all major housing markets in Ontario compared to August 2020.” (wowa.ca)
If you are interested in getting a real estate investment in Ontario, we can help. We help U.S. citizens navigate the real estate market whether they are first-time buyers or seasoned investors. Get in touch by booking an appointment with us now!