By: Tess Kalinowski Real Estate Reporter
It’s too soon to say what the U.S. election means, but Canadian real estate looks even better to foreign buyers, say some experts. Canadians should not expect a flood of president-elect Donald Trump exiles to further fuel the Toronto region’s hot housing market. But the shocking U.S. election could, at least in the foreseeable future, make our real estate an increasingly attractive investment, according to some experts. Many housing analysts wouldn’t predict the impact of Trump’s ascendancy. “It’s too early to know what it means for Canadian housing markets. Nobody knows what it means for the Canadian economy writ large, let alone housing markets across the country,” said a statement from Canadian Real Estate Association chief economist Gregory Klump.
But for those who already see Canada as an attractive, stable place, the U.S. election could heighten that perception. Many people are “shocked and stunned” by the result. Many Call it strong, fair, tolerant and welcoming — could stand out even more clearly now as a desired place to invest capital in real property. “Countries compete for immigrants, those with the best skills and resources, and differentiation could be very helpful for Canada. A Trump-led America will look very different from Canada.
In Canada, there are mixed feelings about the impact of foreign real estate investment. While it helped drive up the temperature on the country’s hottest markets in Vancouver and the Toronto area, it has been criticized for pushing prices beyond the means of ordinary families. In B.C. a 15-per-cent tax on non-Canadian resident buyers has shocked the market. This week, Ontario Finance Minister Charles Sousa said he isn’t looking at a similar tax here, but he is expected to announce new assistance for first-time buyers in an economic statement on Monday. While there were a few nervous guffaws during the campaign about Americans seeking refuge in Canada if Trump won the presidency, that’s highly unlikely, said James McKellar, a professor of real estate and infrastructure at York University’s Schulich School of Business. “Americans really don’t know much about Canada. It’s just not on the radar,” he said.
Even if they could get jobs and pass Canada’s rigorous immigration rules, they probably wouldn’t like the high price of housing and taxes here, although that would be offset somewhat by the low Canadian dollar, he added. “I don’t think you’ll see a movement of bodies. I think it will simply underscore this movement of foreign capital into Canada,” said McKellar.What people are certain about is Toronto’s consistent rankings for offering one of the best qualities of life in the world and that isn’t going to change.“Even Rob Ford didn’t make a dent in that,” he said.
Big investors won’t shy away from buying in cities such as New York, said McKellar. But Canadians who own property and comprise the biggest segment of foreign residential buyers south of the border, will begin to look at getting out. But that won’t necessarily be related to Trump. The investor in Florida that’s getting out simply because the impact of global warming and realizes that in the next 10 years, the number of storms, the amount of flooding, uninsured … there’s more and more uncertainty. The surge of Canadian sunbirds who bought up property in the sunbelt states during the recession, has been reversing since the U.S. dollar gained strength in 2014. There are some property owners becoming nervous about spending extended periods of time there. It’s even possible that could spin off to more property buyers in Canadian resort areas such as Quebec, Muskoka and British Columbia.