Americans are the third largest group of immigrants to Canada and even a slight increase in them moving north post-Trump’s win could have broad implications for the Canadian real estate market.
Given the 15% property transfer tax on foreign real estate buyers in Metro Vancouver, though, British Columbian’s should not expect a flock of Trump exiles to re-fuel Metro Vancouver housing market anytime soon.
However, the jaw-dropping U.S. presidential election could, at least in the foreseeable future, make our real estate industry an increasingly attractive investment.
Impact on Homebuyers: Sustained Low Mortgage Rates
Earlier this year, the Bank of Canada (BoC) raised its growth outlook with a forecasted interest rate hike in the latter half of 2017; however, Trump’s win may help suppress any potential mortgage rate increase that was on the horizon. It’s unlikely that the BoC will increase rates, so we can probably expect sustained low rate environments in both Canada and the U.S. for the foreseeable future, but only time will tell.
The sustained low mortgage rates won’t stop the minute increase in mortgage rates, caused by last month’s Federal Liberal mortgage rule changes.
Impact on Canadian Home Sellers: Demand for Canadian Property
Americans with aspirations of moving to Canada (or perhaps purchasing a vacation property) may take a toe in the water approach by testing out the social fit in a new country by buying a secondary property. I believe demand may increase somewhat, but I don’t expect Americans to flood to Canada in droves post the federal government’s attempt to cool the housing market. Then again, it’s too early to call.
On election night, we saw the U.S. dollar plummet, but on the morning of November 9, 2016, the U.S. dollar stabilized and overnight losses recovered. Assuming the U.S. dollar won’t lose its value, U.S. buyers will have high purchasing power in inland BC such as Whistler and Kelowna – those areas not affected by the recent property tax.
We have helped many new immigrants get started in the Canadian real estate market. For tips on how U.S. citizens can buy property in Canada, contact us today or visit https://www.loanbox.ca/bc-mortgages/new-immigrants/
