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Foreign Buyers Play an Important role in this Hot Real Estate Market |
Foreign real estate investors play an important role in the Canadian housing market, especially in bigger cities such as Vancouver and Toronto. The number of foreigners investing in Canadian real estate are on the rise.
According to a 2013 CREA Members Survey, 31.4 per cent of REALTOR® members of the Canadian Real Estate Association have worked with at least one foreign investor over the last year.
Moreover, 54.8 per cent of members REALTOR® with foreign clients have either one or two of these Foreign investors clients, while 13.4 per cent have more than five.
Most foreign buyers are from China (21.4 per cent) and the United States (15.2 per cent).
In the wake of the Arab Spring uprisings we have seen more and more investors from the Middle East who often favour established suburban neighbourhoods or busy downtown core areas.
They often invest in Canadian real estate for safety and stability purposes and have a lot's of capital available for investment and feel that real estate is a very smart form of investment.
The number of buyers from the Indian subcontinent in Canada is growing and so is their importance for the Canadian housing market.
Foreign buyers play an important role in this hot Market, especially in luxury Condo and Single Family properties in some of Canada's most prominent markets.
Data figures released by CREA in 2013, indicate 37.9 per cent of properties purchased by international clients sold for more than $500,000.
They're looking for properties located in well-situated neighbourhoods in large markets.
South of the border in the U.S., the trend is similarly the same with high ratio of foreigners investing in real estate.
According to the U.S. National Association of Realtor's®, approximately 28 per cent of U.S. Realtor® have worked with international investor. and about 88 per cent of these Realtor's® have worked with one to five foreign clients and 4 per cent have worked with more than 10 clients.
Majority of the foreign buyers of U.S. properties (54 per cent) were from Canada (19 per cent), China (16 per cent), Mexico (9 per cent), India (5 per cent), and the U.K. (5 per cent).
Despite of Canada first spot in terms of transactions volume, China accounted for the largest dollar volume sales because of the higher average price per properties purchased by Chinese buyers.
Canadian home Sellers should be prepared to get acquainted with the art of the "haggle." Though haggling isn't common in North America, the deal is never "final." with foreign Investor usually, there are more than one or two rounds of negotiations: the agreement of purchase and sale could be renegotiated often till just days before closing.
Since foreign buyers and sellers comprise an important part of the Canadian and U.S. housing markets and with their number increasing, home Sellers and Realtor's® should be prepared to know how to deal with them so that their deals don't fail on cultural misunderstandings.
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