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In the 21st century, the property market in Canada --
the Great White North -- is dominated by people looking
to purchase vacation properties and by investors looking
to capitalize on the growth that is being experienced
in some of the larger cities within the country. What
is important to keep in mind is that the vast majority
of the citizens of Canada actually live within one hundred
miles of the Canadian and U.S. border. As a result,
the hot markets for property -- with the exception of
some holiday and vacation properties located further
north -- tend to be along the one hundred mile band
near the Canadian and U.S. borderline.
With all of this noted, there are some different opportunities
available to a foreign national who is interested in
making an investment in Canadian property -- either
for personal, commercial or investment purposes.
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Investment Property in Canada |
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As mentioned previously, the vast majority of the population
of the nation of Canada is situated in a one hundred mile
radius from the Canadian and U.S. border. Therefore, when
it comes to real property investing, the marketplaces that
a foreign national should serious consider is that band of
property that lies in those cities and communities within
that hundred mile band. By far, this represents the area in
which the greatest amount of growth in both the real estate
market and the development of other commercial enterprises
is being seen in the 21st century.
Commercial properties remain a decent investment when it comes
to real estate in Canada. As of yet, most of the major Canadian
locations have not been overdeveloped. There remains a decent
demand for commercial building space in most of the major
Canadian points of commerce. As a result, a foreign national
interested in investing in commercial property does have room
to maneuver in this day and age.
People with a more limited amount of money to invest might
want to consider investing in residential property that can
be leased to travelers on holiday or vacation. Tourism remains
a strong industry in Canada. As a result, there remains money
to be made through the ownership of residential property that
can be made available to tourists within the country.
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Residential Property in Canada |
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Like its neighbor to the south, the Canadian residential real
estate market significantly varies depending on which community
is being considered. Not surprisingly, the costs associated
with single family homes continues to rise in the larger and
more major Canadian cities. At the present time, the more
rural and outlying residential housing market in the country
is a bit flat. In other words, if you are looking for bargains
on residential property, a foreign national might want to
consider one of the more rural or northward lying communities
when looking to purchase such property.
Keeping in mind that a goodly share of the foreign nationals
who are shopping for and purchasing residential property in
Canada are doing so to set up a holiday retreat. Therefore,
a more rural setting oftentimes is a welcome choice for such
a property investor.
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Residential Real Estate - Apartments in Canada |
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There is something of a boom when it comes to the residential
property market as far as apartment units are concerned. With
some growth being experienced in some of the more major Canadian
cities, the demand for apartments and similar types of multi-family
housing units is increasing.
Many foreign nationals who have a desire to experience Canadian
life for holiday purposes are snatching up apartment units
in different cities in the country. More often than not, these
foreigners are making the purchases of such properties in
the larger cities at the southern end of the country.
In some more rural areas, the number of apartment units also
has been increasing in recent years. Some foreign nationals
have taken to investing in these types of operations for investment
purposes and have taken to buying shares in apartment complex
enterprises.
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Holiday Property in Canadian Holiday Resorts |
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As referenced previously, tourism and travel remains a top
industry in Canada. Indeed, each and every year, an ever growing
number of men and women are flocking to the Great White North
for holiday or vacation purposes. Consequently, the demand
for holiday real property has increased significantly, particularly
over the course of the past twenty to twenty five years.
Quite like in the United States, investment in holiday property
in Canada is taking two different forms. First of all, people
-- both Canadians and foreign nationals -- are buying holiday
property for their own, personal use. In addition (and as
has been mentioned previously) a growing number of people
are buying vacation properties to be utilized for more of
an investment purpose. Foreign nationals, for example, can
be found buying holiday property which they then in turn lease
or rent to other individuals who happen to be on vacation
of holiday. For some investors, this has proven to be a very
lucrative avenue of real estate ownership. |
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Specific Steps to Buying Property in Canada |
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In Canada, all matters pertaining to the buying and the selling
of property is subject to governmental regulation. Once the
parties to a potential sale of property have agreed on a price
(after negotiating between themselves), a preliminary contract
is entered into between the parties. This preliminary contract
is known either as an Offer to Purchase or as an Agreement
of Purchase and Sale. At the time the preliminary agreement
is entered into between the parties, a deposit is made by
the buyer.
The preliminary agreement can take one of two forms. On the
one hand, the preliminary agreement can be conditional. By
conditional, it is meant that certain events need to occur
or certain milestones accomplished before a contract can become
firm. An example of such a conditional provision would be
one to obtain financing. If the condition or conditions within
the agreement cannot be satisfied for some reason, the seller
will receive most of his or her deposit back.
A firm preliminary contract is one in which there are no conditional
provisions. If a firm preliminary agreement is not fulfilled,
financial penalties can be imposed. For example, if the seller
does not perform under the contract, he or she will lose the
deposit paid. Likewise, some sort of financial penalty will
be imposed on the seller if he or she does not perform under
the terms of the firm preliminary agreement.
Within the provisions of the preliminary agreement will be
established a completion date. The completion date is when
all of the conditions in the preliminary agreement need to
met. It is at this point that the remainder of the purchase
price will be paid by the buyer to the seller. (Obviously,
the buyer will need to have his or her financing in place
by this point in time.) It is at this juncture that the transfer
of ownership of the property from the buyer to the seller
will occur.
The money associated with the sale is paid whether through
a solicitor or a notary. At this juncture, the buyer and the
seller will sign what is known as a Definitive Contract. In
the French-speaking province of Quebec, this is called Acte
de Vente. In Quebec, the final part of the sale is overseen
by a notary (or notaire in Quebec) who is a governmental official.
In other provinces within Canada, a solicitor can oversee
and handle the final steps of the real estate sales transaction.
In that most people will require financing to purchase property
in Canada, it is important to generally understand the lending
process in that country. For the most part, mortgages in Canada are so-called full status arrangements. Full status means
that the lender will make a thorough and complete investigation
of a borrower's background and credit history.
In Canada, a purchaser of real estate will have to pay about
35% of the total purchase price out of his or her pocket.
In many instances, this will be the size of the deposit associated
with the preliminary contract to purchase property. The mortgage
itself, in most cases, will be for a term of 25 years with
the final payment needing to be made before the borrower reaches
the age of 70.
Lenders in Canada pay very close attention to a borrower's
available income. Indeed, in most instances, a lender will
closely analyze what a borrower will be expected to earn over
the lifetime of the loan.
The mortgage loan itself will be secured by the property that
is being purchased within Canada. Oftentimes a foreign national
will seek to have property in another country utilized to
at least partial zed collateralize a loan in another country.
In Canada, this is not an accepted practice.
By understanding the ins and outs of the real estate purchase
transaction in Canada, an investor will be in a far better
position to make appropriate decisions pertaining to the buying
and selling of property in that country.
Property Abroad always recommends using a Solicitor
or Lawyer
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Further Information
on Canada |
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CANADA
