Investment hotspot emerges in unlikely spot

Record-low interest rates and a weak Canadian dollar have inspired investors to snatch up real estate in Canada’s major markets but smaller hotspots, such as Saint John have been quietly singled out as superior investment hubs.

“We have people coming from the U.S., coming from places like Maine, New York and New England, while we’re also seeing people coming from places like Korea and China as well,” Kim Legge, a real estate agent with Royal LePage Atlantic, told CREW.

“We’re also starting see people come back home from places like Alberta and Vancouver because of the oil situation and just general homesickness as well.”

The agent’s comments echo the latest housing statistics from the Saint John Real Estate Board, which shows the average sales price of a home in New Brunswick grew by three per cent and as much as 27 per cent year over year from 2003 to 2009 to $180,000.

A weak Canadian dollar has spurred significant interest from U.S. investors looking for vacation homes and Asian buyers looking to settle in the quiet city to settle with family and educate their youth," said Legge.

Around 2007, as the United States dollar weakened relative to the Canadian dollar, the number of American buyers of second and vacation homes in New Brunswick took a nose-dive, agents said.

However, for the past 18 months, the greenback has strengthened, drawing more people to its doorstep.

And with no restrictions for foreign homebuyers in New Brunswick, it is attracting investors to put 35 per cent down to buy a property in Saint John. What’s more, homebuyers will have to shell out two per cent to 2.5 per cent of the home’s sales price for closing costs.

“It’s been a buyer’s market over the last year,” Legge said. “We’re seeing increases in interest and activity across the board. People who invested last year are starting to see price appreciation occur."

The average price of homes in St. Andrew’s is $202,582; on the Kingston Peninsula, it is $167,896; and in Cambridge-Narrows, it is $175,772. 

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