Brexit could garner investor interest in other Canadian housing markets - analyst

Last week’s Brexit poll that led to the U.K.’s withdrawal from the European Union has sent uncertainty reverberating through the world’s markets, but an industry analyst argued that any shockwaves would only be temporary, and that the Canadian real estate sector can actually leverage the utterly changed global financial landscape to its advantage.
 
As reported by Romana King for MoneySense, PropertyGuys.com founder and chief analyst Walter Melanson stated that Canada could serve as a haven for investors fleeing from the Old World.
 
“We don’t want to scare money out of Canada, but the feds need to figure out where they want foreign investment and then build those incentives,” Melanson said.
 
Canadian housing markets apart from Vancouver and Toronto—which are expected to remain overheated due to the low interest rates that would ensue from Brexit—can also be built up to attract overseas investor interest, the analyst stated.
 
“If this foreign money is spent with an investment thesis that has little to do with rental income or future appreciation then these investors don’t care if they purchase a $1 million property in Vancouver or five properties in St. John’s, Newfoundland worth $1 million. They just want the stability that Canada’s real estate has to offer when parking their money,” Melanson explained.
 
On the other side of the Atlantic, Melanson predicted that the Brexit polls would have a moderating influence on British property prices.
 
“Foreign investors may see this as another example of buying a good investment as a cheaper price. Much like the speculators who bought when the U.S. housing market took a 50% dive, this same style of buyer may see this as an opportunity to get into the London market,” he said.
 
A few days before the referendum, Finance Minister Bill Morneau advised Canadian individuals and businesses with assets in the U.K. to begin enacting their plan Bs, as they might experience headwinds due to Brexit’s impact on global finance.
 
The U.K.’s departure from the EU means that it would need to re-negotiate a new and separate trade agreement with Canada, a tortuous process that could take years, if not decades.

Related Stories:

Canada real estate, exports to experience significant Brexit impact - analysts
Economic aftershocks of Brexit will keep Canada mortgage rates at record lows

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COMMENTS

  • by Eaicsmith 2016-06-29 12:06:47 PM

    As a Canadian property owner living in UK and working all across Europe , and l am an economist let me correct this uninformed set of views.Europe needs the UK buying power at this moment 100 billion dollars net purchases from Europe , The EU would not chance a tariff war as they are the loosers .

    Immigration controls will be point based as in Canada who has vast land area and small immigration numbers thus logically a sensible policy for Canada and the UK even with bigger immigration .l note Canada's trade deal with EU does not allow free movement of people to Canada nor should it.be into the UK . Plus we can now allow entry to UK on points for all including Canadians not just EU residents.

    Additionally the UK has lengthy relationships with the commonwealth why put the EU ahead of our commonwealth friends

    Then there are new relationships with Asia that should be pursued as that is where there is growth more so and especially when the EU is a very wasteful entity,a huge additional administration , paid for by only a few countries of which UK is one

    I have seen first hand the waste and the endless feeding trough for the administrators.

    So this story goes on. The UK is still the greatest financial centre with huge capability and capacity . It will not loose that strength

    Everything now being said by the EU is simply covering current in built weaknesses. The UK is still one of the biggest inveztors in the EU , they will not wish to loose that money as individual EU property markats are desperate for that ongoing investment .

    The UK banking system is the strongest in Europe , the EU banks are still in very weak condition. Italian banks are very close to.needing massive bailouts.circa 500 billion dollars.

    At the moment the EU is upset as all their problems are now more visable.

    However Canadian property is still not on the investment radar in the UK in any sense in the current foreseable future.

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